Congress Averts Flood Insurance Lapse
Congress has averted shutting down the nation's flood insurance program in the middle of hurricane season.
The Senate voted 86-12 on Tuesday to extend the National Flood Insurance Program through Nov. 30. Without the extension, signed by President Donald Trump, the program would have expired at midnight Tuesday.
The House passed the measure last week. The program is the sole source of flood insurance for more than 5 million homes and businesses across the U.S.
A lapse would have prevented the program from selling new policies and renewing current ones. The National Realtors Association said up to 40,000 property sales per month, or about 1,330 home sales per day, were put on hold in 2010 after Congress let the flood insurance lapse for about a month.
Without flood insurance, mandated for homeowners with mortgages, buyers were unable to close deals on houses. Louisiana lawmakers have pushed for weeks to extend the program to avoid disrupting insurance coverage and claims during hurricane season.
"It would have been bone-deep, down-to-the-marrow stupid to let the National Flood Insurance Program expire in the middle of hurricane season, and my colleagues realized that," U.S. Sen. John Kennedy, R-La., said in a news release after the vote. "With this extension in place, we can tackle long-term reforms. The last time we truly reformed the NFIP was never. It's about time we did. The program needs to be affordable and sustainable."
Opponents in both the House and Senate favored a separate measure that would have included reforms they said are aimed at addressing the program's debt, estimated at $25 billion. The House passed a measure in November that includes some reforms, though Louisiana lawmakers expressed concerns about potential price increases.
Critics have sought to bring costs more in line with the risk of flooding, saying the program keeps rates artificially low and encourages people to live in harm's way at taxpayers' expense.
"The National Flood Insurance Program is a national embarrassment, and everyone in this building knows it," Sen. Mike Lee, R-Utah, argued last week on the Senate floor. "It is fiscally unsustainable because it is structurally unsound." Lee said reforms, including letting private insurers offer flood policies, are long overdue.
He proposed limiting eligibility for federal flood insurance to homes worth $2.5 million or less, a measure the Senate rejected. "It's unfair to ask taxpayers to make expensive, dangerous homes -- 25 percent of which are vacation homes -- artificially more affordable," Lee said. "It's unfair and unsustainable.
The failure of the Flood Insurance Program is not an economic theory or ideological speculation -- it is a fact." -- Executive Editor Keith Magill can be reached at 857-2201 or [email protected]. Follow him on Twitter @CourierEditor.
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