Lawmakers take action on NFIP ahead of hurricane season
Federal legislators have taken action on the troubled National Flood Insurance Program (NFIP) this week, voting for a short-term extension for the program. NFIP has been plagued with financial woes for several years, after Hurricane Katrina dealt a destructive blow against the U.S. in 2005. The program accounts for the majority of flood insurance policies in the country and is often considered the best place for homeowners to find affordable coverage. Because of this, the program has acquired a massive number of policyholders, but has been unable to keep its profit sufficiently high. Lapses in the program have caused problems for homeowners in the past, but the latest extension to NFIP may prove beneficial for the program.
Program’s woes have yet to garner enough merit to win the undivided attention of legislators
Despite the problems facing NFIP, the program has managed to avoid any significant reforms that could improve it. Legislators have not been eager to tackle the mammoth task of renovating the program to make it more economically viable. This seems to be especially true during election years, where the program is only able to garner attention when it is on the verge of expiration. Though lawmakers have shied away from fixing the problems of NFIP, they have been keen to ensure that the program does not lapse, opting instead to approve short-term extensions.
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House and Senate approve of 60-day extension
The latest of these extensions was approved this week by a voice vote from the House of Representatives. The vote approved a measure that had already been approved by the Senate to extend the lifetime of NFIP for 60 days. Some legislators are claiming the extension to be a victory for homeowners throughout the country, especially for those in flood-risk areas. With the 2012 hurricane season finally here, the continued availability of flood insurance is welcome news.
Active hurricane season could bring more problems to NFIP
The extension gives legislators two months to investigate the problems with NFIP and find solutions. Given that 2012 is an election year, fixing the flood insurance program may not be able to compete with the interest that other political endeavors are generating. If this is the case, yet another short-term extension may be in the works for the program. If the 2012 hurricane season is active, the insurance program may yet be faced with more financial troubles.