A federal bill to reform the troubled National Flood Insurance Program (NFIP) took a first step forward with approval by a House subcommittee on April 6.
The bill would phase in more accurate pricing based on risk, address issues about mapping, introduce coverage improvements for consumers and reauthorize the program for five years.
In the last three years, the NFIP has operated under a series of short-term extensions and, without Congressional action, will expire Sept. 30. Last year, the program lapsed four times, leaving would-be insurance buyers high and dry for a total of 53 days and creating uncertainty in the housing market. Real estate closings in flood-prone areas hinge on property owners securing flood insurance.
Flood insurance program in need of reform
The Government Accountability Office (GAO) has listed the program, now $17.75 billion in debt, as high-risk since 2006. The program was last reformed in 2004 and has been criticized for under-pricing policies and encouraging development in flood-prone areas.
Insurance trade groups praised the subcommittee's action, and the National Association of Mutual Insurance Companies urged the Financial Services Committee to move the bill forward quickly.
"Today's vote was an important first step for reforming the National Flood Insurance Program," Jimi Grande, senior vice president of federal and political affairs, said in a statement. "But there's still a long way to go."