WASHINGTON – March 30, 2017 – On September 30 – six months from today – the National Flood Insurance Program (NFIP) will expire. The National Association of Realtors® (NAR) says it's working closely with federal regulators and members of Congress to strengthen the program and clear the way for a private market to take hold; NAR has also issued a series of principles to improve access and affordability for consumers.
But NAR says the program's September 30 reauthorization deadline threatens consumers. NAR President William E. Brown believes that expiration would deal significant damage to current policy-holding property owners, as well as threaten property sales and the broader housing market.
"When the NFIP expired in 2010, over 1,300 home sales were disrupted every day as a result," Brown says. "That's over 40,000 every month. Flood insurance is required for a mortgage in the 100-year floodplain, but without access to the NFIP, buyers simply couldn't get a mortgage or vital protection from the No. 1 cause of loss of property and life: flooding."
Brown says flooding affects far more than coastal communities, and home buyers aren't the only ones at risk.
"Policyholders in over 22,000 communities across the country depend on the NFIP to protect homes and businesses from torrential rain, swollen rivers and lakes, snowmelt, failing infrastructure, as well as storm surges and hurricanes," he adds. "When that lifeline is cut off, the NFIP can't issue new policies or renew existing residential or commercial policies that expire. That means current home and business owners may find their most important asset unprotected.
Last year was the third largest claims payout year in NFIP's history, costing more than $4 billion. While there were five billion-dollar floods, including Hurricane Matthew, four of the five events occurred inland. The largest single event was in Baton Rouge, Louisiana.
"The NFIP isn't perfect and reforms are needed," Brown says. "We will continue working closely with everyone involved to achieve those reforms. Good work has been done in Congress, at FEMA and elsewhere to clear the way for those efforts. We thank leaders on both sides of the aisle for all they've done up to this point. Now, it's time for action. Congress has six months to do the right thing and pass a long-term re-authorization of the program. We're hoping they do just that."
© 2017 Florida Realtors
Reprinted with permission Florida Realtors. All rights reserved.