President Signs Flood Insurance Extension
John Jordan | August 1, 2018
WASHINGTON—On July 31, President Donald Trump signed into law the “National Flood Insurance Program Extension Act of 2018” (S. 1182), which reauthorizes the Federal Emergency Management Agency to enter into new contracts for flood insurance through Nov. 30, 2018.
The President’s action came after the U.S. Senate passed the short-term flood extension measure by an 86-12 margin earlier in the day. The flood insurance program’s authorization that covers more than five million households and collects more than $3 billion in premiums each year was set to expire on Aug. 1.
Flood insurance claims in 2017 exceeded $8.7 billion, with more claims from last year’s storms expected to be filed in 2018, according to a report in the Washington Post. The National Flood Insurance Program has more than $20 billion in public debt on its books; an additional $16 billion was canceled last year to avoid a $30-billion ceiling on the program’s borrowing, the newspaper reported.
The extension is the seventh time Congress has passed a stopgap measure since the previous long-term authorization expired in 2017.
The National Association of Realtors, as well as state and local Realtor associations have been urging passage of an extension of the program for months. Almost 125,000 Realtors, or roughly 15% of the membership of NAR, sent letters to their respective senators/members of Congress in support of the extension.
NAR President Elizabeth Mendenhall applauded the flood insurance extension. “We applaud lawmakers for taking this needed action to prevent disruptions to closings in thousands of communities across the country. Although the National Flood Insurance Program will be extended through November 30 when signed into law, the NFIP is in desperate need of reforms that will make it solvent and sustainable in the long term,” she said. “The National Association of Realtors will continue fighting for these reforms as the next NFIP reauthorization discussions loom later this year.”
U.S. Senator Roger Wicker, R-MS., seemed to echo Mendenhall’s sentiments that reform of the flood insurance program is in order.
“Passing this reauthorization right before the deadline does not entitle us to pat ourselves on the back. Instead, it should motivate members to work across the aisle to provide meaningful reforms,” Wicker said. “We need to make this program financially sustainable for the long-term. But we also need to assure property owners they are not going to be hit with a huge insurance bill that they cannot afford.”
Wicker has proposed several reforms to improve the National Flood Insurance Program, including the “Coastal Implementation Act,” the “Municipality Empowerment Mapping Achievement (MEMA) Act,” and the “Flood Insurance Continuing Education and Training Act.” Wicker also supports competition from the private sector to bring high flood insurance rates down.
David H. Stevens, CMB, President and CEO of the Mortgage Bankers Association (MBA) also commended Congress for the short-term extension passage, but called for a long-term solution.
“I want to commend Congress for passing this short-term extension of the NFIP. This will protect residential and commercial real estate markets from potential harm, and provide stability for those that sell and administer the policies to millions of Americans, Stevens said. “MBA now calls on Congress to negotiate a long-term reauthorization of the NFIP which provides certainty and protections for consumers, expands the private flood insurance market, and exempts commercial/multifamily properties from NFIP mandatory purchase requirements.”