US flood insurance scheme extended until December 16
US flood insurance scheme extended until December 16
10 October 2022
US President Joe Biden has signed legislation passed by Congress to extend the National Flood Insurance Program’s (NFIP) authorisation until December 16.
The extension means the Federal Emergency Management Agency (FEMA), which manages the government-backed scheme, can continue sell and renew flood insurance policies.
“FEMA and Congress have never failed to honour the flood insurance contracts in place with NFIP policyholders,” FEMA said in a statement.
“Should the NFIP’s authorisation lapse, FEMA would still have authority to ensure the payment of valid claims with available funds.
“However, FEMA would stop selling and renewing policies for millions of properties in communities across the nation.”
FEMA says about 40,000 home sale closings per month may have been impacted if the program had been allowed to lapse.
“NFIP reauthorisation is an opportunity for Congress to take bold steps to reduce the complexity of the program and strengthen the NFIP’s financial framework so that the program can continue helping individuals and communities take the critical step of securing flood insurance,” FEMA says.
“The level of damage from recent catastrophic storms makes it clear that FEMA needs a holistic plan to ready the nation for managing the cost of flooding under the NFIP.”
The Risk and Insurance Management Society (RIMS) says passage of the reauthorised NFIP bill provides critical financial support to coastal properties, as well as many commercial and residential properties located in flood zones across the US.
“Since 2018, every single US state has experienced a flood emergency,” RIMS President Patrick Sterling said.
“Risk professionals count on the National Flood Insurance Program to protect our organisations’ assets and to remain in good standing with our commercial real estate contracts.
“RIMS is encouraged by this bi-partisan effort and will continue to work with our partners on Capitol Hill to support the development of a longer-term extension in December.”
