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 or contact your local Schneider Downs representative.

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