NFIP set to expire without Congressional action
The National Flood Insurance Program (NFIP) is scheduled to expire, once again, on May 31 of this year. The program is the primary source of flood insurance for homeowners throughout the country. Many private insurance companies either do not offer or have stopped offering flood insurance coverage in states where floods and heavy rainfall is common. As such, many homeowners rely on the federal program to protect them from natural disasters. Unfortunately, the program has been crippled by monumental debt, which has threatened to cause lapses in coverage if Congress does not take action.
FEMA advocates renewal of the program
FEMA, the agency that oversees NFIP, has long been an advocate for renewing the federal program. Federal lawmakers have also expressed interest in renewing the program, but the issue has been pushed aside for several years. Legislators have long held that more serious issues are calling for their attention, which means that they have been unable to examine the deep-seated issues of the program and work on a solution. Traditionally, Congress has extended the life of the program in five-year intervals. This has changed in recent years, however, and extensions are now typically between 30 days and 6 months.
NFIP expiration coincides with the beginning of hurricane season
NFIP is scheduled to expire at the end of May this year, and FEMA officials believe this will cause serious problems for many homeowners throughout the U.S. The agency suggests that if the program is not renewed, it will not be able to issue new flood insurance policies. Many policies that are currently active could also be dissolved because of the program’s inability to continue supporting them. This could be disastrous as the 2012 hurricane season is scheduled to begin June 1.
Congress must tackle NFIP debt to solve the program’s long-standing problems
Many private insurance companies support long-term renewal of NFIP, believing that it provides the country’s insurance industry and consumers a degree of protection against natural disasters. The program is currently more than $18 billion in debt, which makes finding a solution to the program’s problems quite complicated. If Congress does not act, however, some 5.6 million policyholders may find their flood coverage lacking or non-existent.