The National Flood Insurance Program, which provides flood insurance to the majority of homes in flood prone and coastal areas throughout the country, will lapse at the end of September. Legislators are feeling the pressure of a hurricane season that is bringing a sleuth of storms from the Atlantic Ocean as well as insurance companies to make changes to the existing program so that it will continue.
The other day, a Senate Banking subcommittee heard recommendations from representatives of the Government Accountability Office. The panel heard proposed improvements to the program, along with plans on how to relieve the program’s $1.8 billion debt.
The Government Accountability Office proposed a series of concepts that would, theoretically, bolster the insurance program. Among these proposals is the allowance of the program to charge premiums that are more in line with the level of risk it is insuring against, and making improvements to existing flood maps. However, none of these measures would fix the underlying problems in the system, says the National Association of Mutual Insurance Companies (NAMIC).
NAMIC argues that there are basic structural flaws within the system that keep it from operating efficiently. The organization had raised these concerns six years ago, before Hurricane Katrina ravaged the Gulf Coast. They again voiced their concerns a year ago. Congress has yet to act, but may be spurred to do something regarding the program in light of recent natural disasters that have caused an unprecedented level of flooding.
The panel, while undecided in what actions to take, insists that there is still time to form a clear and effective plan to improve the National Flood Insurance Program.