National Flood Insurance Program Extension

As I watched the pounding rain from my window for the third straight day, I could only imagine the damage this unpredictable spring weather was inflicting upon Pennsylvania’s rivers and streams.  According to FEMA, floods are the nation’s most common and destructive natural disaster, and homeowner’s and renter’s insurance typically does not cover flood damage.  To help protect American homes and businesses, Congress created the National Flood Insurance Program (NFIP) in 1968 after the devastating loss of life and property caused by Hurricane Betsy.

On May 31, 2019, the NFIP was set to expire.  Prior to this deadline, Congress had passed numerous short-term extensions to the program that proposed no changes and created uncertainty in the insurance and housing markets.  What the NFIP needed was a long-term extension that would give Congress time to agree upon substantive changes and updates to the program.

Congress is responsible for periodically reviewing the NFIP’s legal authority to operate, and along with FEMA, it has continued to honor active flood insurance contracts with current policyholders.  If the NFIP’s authorization were to lapse, FEMA would still have the authority to ensure payment of claims with the available funds, although the lapse would stop the sale and renewal of policies for millions of properties across the nation.  A reauthorization would give Congress the opportunity to strengthen the NFIP’s financial framework and reduce the overall complexity of the program.

As reauthorization discussions continued, Congress passed another limited extension to the program on May 31.  Then, on June 7, the House Financial Services Committee announced that they had reached a bipartisan agreement on a five-year extension of the NFIP: The NFIP Reauthorization Act of 2019.  The long-overdue changes will improve the accuracy of flood maps, enhance mitigation and address affordability.  One day before this agreement was publicized, a disaster aid relief package was also authorized that further extends the program’s expiration until September (the twelfth temporary solution since 2017).  The drafted bill includes a series of reforms to the program’s operations and ultimately extends it through September 30, 2024.

On June 12, the NFIP proposal advanced unanimously out of the House Financial Services Committee as a result of the first major display of compromise on the program.  House leaders are now hoping to fast track the bill and advance it to the Senate before the next temporary deadline at the end of September.  Additionally, the committee also unanimously passed a bill that would streamline the NFIP claims process.

Although the bills do not currently resolve the issue of the program’s debt, the bipartisan compromise provides hope that long-term certainty and key reforms can be accomplished.  If you would like more information on the NFIP, please visit www.fema.gov or contact your local Schneider Downs representative.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

National Flood Insurance Program Extension
National Flood Insurance Program Extension
Continued Compliance with CAISO SQMD Requirements in Non-Reporting Years
Bill S. 1564 Calls for Delay of CECL Implementation Until a Quantitative Economic Impact Study is Completed
Bill S. 1564 Calls for Delay of CECL Implementation Until a Quantitative Economic Impact Study is Completed
Artificial Intelligence in Higher Education

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office
Pittsburgh

One PPG Place, Suite 1700
Pittsburgh, PA 15222

contactsd@schneiderdowns.com
p:412.261.3644     f:412.261.4876

Map of Columbus Office
Columbus

65 East State Street, Suite 2000
Columbus, OH 43215

contactsd@schneiderdowns.com
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102