National Flood Insurance Program Extended Until Dec. 8

National Flood Insurance Program Extended Until Dec. 8

National Flood Insurance Program Extended Until Dec. 8

We've written about how federal flood insurance has serially benefited many of those who refuse to move from river floodplains, sometimes to a fault.

It is hard to determine exactly how many homeowners have flood insurance.

The NAR is calling on Congress to make extending the NFIP a top priority as that will give protection while the necessary work is carried out to finish reforming and reauthorizing the programme.

The National Flood Insurance Program (NFIP), which was set to expire on September 30, was extended until December 8 in a legislative package signed by President Trump on Friday afternoon that authorized $15 billion in emergency funding for Hurricane Harvey victims and raised the debt limit and funding of the federal government. Since the start of the storm, the administration has handed out more than $49 million in loans, according to spokeswoman Carol Chastang, and $450 million of the $15 billion appropriated to Harvey relief in a bill passed by the U.S. Senate on Friday will go to the Small Business Administration's disaster program.

In recent years, the number of such policies has been dropping across the country.

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Building a home on the shores of the ocean or in a designated flood plain is also risky.

Real estate data company CoreLogic estimates that approximately 70 percent of flood losses from Harvey will be uninsured.

What does flood insurance cover? Reinsurance policies purchased by FEMA could cover about $1 billion, a small fraction of what the program will need. It passed a bill in 2012 that would have raised premiums, but after an outcry from numerous 5 million policyholders, Congress changed the program again in 2014 to cap the increases policyholders would have to pay. "Think about it: If you're going to build a new structure in the flood zone, the private sector can insure it".

The National Flood Insurance Program has faced considerable criticism over its underwriting and pricing policies, which have resulted in a substantial debt. Higher premiums have been a major deterrent to getting flood coverage, even though the $20,000 it can cost to fix the damage from just an inch of flooding far exceeds the $1,043 average annual premium in Maine. "If you've lost your home and you don't have insurance, that's a good time to walk away from your property", said R.J. Lehmann, an insurance expert at the R Street Institute, a libertarian research organization in Washington.

The insurance program is borrowing from the U.S. Treasury to cover its costs, which means that taxpayers could ultimately be on the hook.

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RMS puts the hurricane Harvey losses for the industry at between $25 to $35 billion, with an upper bound of $40 billion, including gross losses for the NFIP of between $7 to $10 billion. The Harvey response alone eventually could double the $136 billion in government aid spent after Hurricane Katrina flooded New Orleans... People are more likely to buy, build or rebuild homes in flood-prone areas and have diminished incentives to invest in flood risk mitigation, such as by elevating their home, if they can buy insurance at below-cost rates.

The average claim in the past 12 years has been for about $50,000, which means this storm could quickly deplete what little the cash the program has.

These inadequate rates also exacerbate the moral hazard created by flood insurance. But making flood insurance actuarial - making it pay for itself - would be a major step forward. One likely culprit is the increase in premiums.

Fundamentally, the program millions of Americans rely on to help them rebuild their lives after a devastating flood needs to be fixed. Zone AE has the highest risk and rates. His total insurance premiums since buying the house in 1975: $6,000. "In my opinion, pretty much everyone is at risk".

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