There seems to be no resolution in sight for the troubles plaguing the National Flood Insurance Program (NFIP). The program, which provides thousands of homeowners with affordable flood insurance coverage, is scheduled to expire on December 18, but legislators have yet to make an attempt to fix what has been called by insurance professionals a broken system. NFIP has stood before Congress for several months now through a series of imminent expirations. Thus far, legislators have done little else beyond voting to extend the program for another month, but that may change as the program’s massive debt continues to grow.
This week, Congress approved a short-term extension for the program, pushing the next expiration date back to January. While legislators have been slow to take any decisive action on the program, they have worked hard to avoid lapses in coverage offered through NFIP. In 2010, the program expired on four separate occasions. This had a major impact on the real estate industry, especially for homes in areas at risk of flooding.
Senator David Vitter is pushing his fellow lawmakers to support a bill that would extend the lifespan of the program until May 31, 2012. This may give legislators enough time to find a solution for the program’s financial issues. At present, NFIP is $18 billion in debt – an amount that grows the longer legislators hold off on making a move. For now, homeowners will still have their properties protected by NFIP, but given the volatility of Congress, that may change in the near future.