Congressmen aim to halt needed reforms in order to limit the growth of premiums
Federal lawmakers are looking to make changes to the National Flood Insurance Program (NFIP), but some are pushing to postpone much needed reforms. Representatives David Jolly and Gus Bilirakis have introduced a new measure that seeks to put reforms for the federal program on hold. NFIP is currently $23 billion in debt, with no practical way to repay this money. Congress has been working to resolve the program’s financial issues for some time, but proposed reforms have encountered some resistance.
NFIP continues to struggle to overcome its financial problems
NFIP is typically the only place for homeowners to find flood insurance policies. Private companies offer coverage through the program, which serves as a type of financial safety need, protecting these companies from financial risks. Premiums for this coverage have been growing for some time, but Congress has passed measures to artificially suppress rising rates. As such, private insurers have little incentive to offer coverage outside of the program. In some states, however, officials are calling for private companies to enter into the flood insurance market themselves in order to better serve homeowners and businesses.
Lawmakers want to limit premiums for the time being
Jolly and Bilirakis have introduced the Flood Insurance Rate Increase Suspension Act, which aims to further limit the rate at which premiums are growing. Higher premiums are needed to help NFIP recover from its massive debt. The problem, however, is that premiums are growing at a very quick rate, placing consumers under considerable financial pressure. According to Bilirakis, limiting the growth of premiums will be a boon to consumers while Congress figures out better ways to help the ailing federal program.
Major disasters leave NFIP is a troubling financial position
Much of the debt accrued by NFIP is the result of Hurricane Katrina and Hurricane Sandy. These two disasters, though years apart, caused significant financial damage in many states. NFIP struggled to pay claims in the wake of Hurricane Sandy, which resulted in extreme criticism being levied against the program. The program continues to serve as a point of controversy in the United States, with several lawmakers working to help the program recover from its financial troubles.