NFIP Extended for Three More Months
Last month, the US government signed a 3 month extension to the National Flood Insurance Program (NFIP). The House passed the extension which included funding for hurricane relief along with other priorities. The new extension date will now be effective until 12/8/2017. Amid the recent devastation of both Hurricane Harvey and Irma, flood insurance has been brought to the forefront.
According to FEMA’s website, “The National Flood Insurance Program aims to reduce the impact of flooding on private and public structures. It does so by providing affordable insurance to property owners and by encouraging communities to adopt and enforce floodplain management regulations.”
These efforts help alleviate the effects of flooding on new and improved structures. NAR has reported when the NFIP ceased in 2010, more than 1,300 homes sales were in limbo daily. With this short window in place, the House and Senate have committed towards a resolution regarding Century Flood Reform Act. This act will give current and future homeowners the confidence their investment will be protected. The National Association of Professional Insurance Agents stated that their take on the short-term extension as a an opportunity for Congress to provide the financial stability for taxpayers and figure out a way keep NFIP in play for the long-term.
The Congressional Budget Office reported the program has expected a one-year shortage of $1.4 Billion. The CBO did caution that the estimate of claims accounted for low probability, high cost events such as both Hurricane Harvey and Irma.
With that in mind, the estimate is most likely greater than actual costs would be a typical year. In light of this historic hurricane season, there are way too few homeowners with flood insurance. Now is the time to prepare for these natural disasters versus being reactive to the devastation.