National Flood Insurance Program Expires on September 30th

Once again, the National Flood Insurance Program (NFIP) is set to expire. Congress has until September 30th to reauthorize the program that serves 4.7 million policyholders and covers assets totaling $1.28 trillion.

Non-renewal — like what happened from May to July in 2010 — can cause a delay, or even a cancelation of the sale of a home or a property in a flood-prone area. Sadly, the NFIP has been extended 30 times since 2017 and many are worried about another delay.

That leads to another renewal issue.

There’s criticism coming from some quarters about the Federal Emergency Management Agency (FEMA) — which manages the NFIP — instituting Risk Rating 2.0 a couple of years ago. It more accurately sets rates for the risk of homes and businesses in flood prone, and hurricane prone, areas.

That led to many people who used to pay $800 a year for flood insurance seeing their rates rise into the thousands.

Those increases impacted a lot of people in the Gulf States. That has pushed Louisiana Republican Sen. Bill Cassidy into a mission to get Congress to make some drastic changes to Risk Rating 2.0.

So far he hasn’t been successful.

“My team is working on a bipartisan solution that will roll back Risk Rating 2.0, and make flood insurance affordable and accountable again,” Cassidy said. “The real problem is that the flood insurance program is a financial debacle and Congress doesn’t seem capable of fixing it and, instead, what Capitol Hill does is just kick the can down the road.”

Many in real estate and in insurance continue to call on Congress to set the NFIP up with a more permanent solution.

Source link: CNBC — https://bit.ly/3z16adV