On Thursday, September 7, the United States Senate voted to pass a three-month extension of the National Flood Insurance Program (NFIP). The House of Representatives approved the legislation the following day, September 8, and the bill was signed into law by President Trump that afternoon. This legislation ensures that the NFIP will not lapse on September 30, 2017.
NAR will continue their legislative advocacy efforts for H.R. 2874, the 21st Century Flood Reform Act, until this long-term reauthorization and reform bill is enacted. In the meantime, NAR has shared the below talking points. REALTORS(R) are encouraged to review the below information and, when prompted, contact their elected representatives in Congress about this important issue.
- Long Term Reauthorization Is Critical
- Don’t let NFIP lapse. Each lapse costs 40,000 property sales per month.
- Without reauthorization, NFIP cannot issue or renew policies in 22,000 communities where flood insurance is required for a mortgage.
- Accurate Flood Maps Are Essential
- NFIP should use modern mapping technology to produce building-specific risk assessments.
- Currently, property owners bear the burden of amending the maps to remove low-risk buildings from the floodplain.
- Map amendments require property owners to buy 25,000 land surveys each year at $500 each.
- The current method of flood mapping and amendment is inefficient when states are using light detection and ranging (LiDAR) to collect the data for whole neighborhoods at once.
- Risk Mitigation Keeps Rates Affordable
- The best way to keep NFIP rates reasonable is to reduce the risk.
- Elevating a property by two feet can cut flood insurance premiums by as much as two-thirds.
- U.S. government spends $1.4 billion a year on grants to property owners to repair flood damage.
- Mitigating, elevating or relocating these properties would save taxpayers $4 for every $1 spent.
- Currently, property owners cannot access mitigation grant dollars until after the property floods despite it being more cost effective to elevate or relocate beforehand.
- Private Market Options Must Be Included
- Attach the "Flood Insurance Market Parity and Modernization Act" (HR1422/S. 563) to the NFIP Reauthorization Package; this bill was unanimously adopted (419-0) by the House last year.
- NFIP premiums are based on national averages, so half of policyholders pay too much and half pay too little in premiums. Enabling consumers to meet federal requirements with a private plan offers an alternative to overpriced NFIP policies.
- There is a considerable and growing private market that is offering better coverage at a lower cost than the NFIP.