May 22, 2012

Contact: Ken or Kate Gooderham, ASBPA executive directors -- (239) 489-2616
Harry Simmons, ASBPA president -- (910) 200-7867

Don’t let flood insurance be swept away
Congress must act to reauthorize, reform vital protection program

Here are three facts that should send chills down anyone who lives near the water:

• Hurricane season starts June 1.
• Unless Congress acts, the National Flood Insurance Program (NFIP) will expire May 31 – the day before.
• Last year, the NFIP paid out some $1.8 billion in claims – and that was for a year with few hurricanes making landfall in the U.S.

While commonly thought to be solely benefitting America’s ocean coasts, in reality the NFIP helps residents and communities recover from floods across the country – including the destructive riverine flooding that’s too common during spring thaws and landfalling hurricanes in the hours and days after they rake the coast. The NFIP also encourages communities to accurately assess the flood risk to residents and address reasonable problems, in return for giving its citizens access to the federal insurance program.

The NFIP has been a political hot potato for some time now, struggling for reauthorization and actually lapsing a few times in the past few years. Rife with public misconceptions and struggling under a business plan that’s a model for unsustainability, the NFIP has been a reform target for years – and even has been the subject of bills in both the House and Senate to address long-term issues with this crucial program which serves 5.6 million policyholders.
But when you combine reform, reauthorization and recalcitrant lawmakers, delay and deferral ensue. Hence the recurring cliffhangers that have provided the program peril for the past few years as it careens from deadline to deadline in fear of being shut down and leaving policy holders and communities in the lurch.

The impact of such uncertainty is also reflected in real estate, since federally backed mortgages demand flood insurance as part of the closing package. Put NFIP in serious jeopardy, and some 40,000 closing transactions per month could be affected – bad news in the best of times, worse news in an economy when housing is struggling to get back on its feet.

The NFIP has been hanging in limbo long enough. It’s past time for Congress to act, both to reauthorize this necessary program so its future is more assured and to enact those prudent reforms that voices on both sides of the aisle have been calling for over the years.

In an ideal world, reform and reauthorization would move forward hand-in-hand. In the partisan brinksmanship that is embodied in an election-year Washington, that’s not realistic. However, what is realistic is to call for Congress to reauthorize the NFIP now, in advance of the May 31 deadline, for a period of time necessary to outline the differences in any competing reform efforts and allow for the negotiations necessary to bring them into agreement so that a final, more substantial reauthorization can be approved well in advance of the next deadline.

This would ensure a needed program stays in place, enable it to evolve into a more equitable and sustainable program into the future, and take away the uncertainty that undercuts both homeowner security and economic recovery.
Such action won’t make hurricane season – or any of the flood-prone times of year -- any less nerve-wracking… but it would make property owners a little more secure that should disaster strike, the NFIP will still be there to help them.

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ABOUT ASBPA: Founded in 1926, the ASBPA promotes the integration of science, policies and actions that maintain, protect and enhance the coasts of America. For more information on ASBPA, go to www.asbpa.org, facebook or www.twitter.com/asbpa.