Lawmakers pressed to save flood insurance program
WASHINGTON — Numerous business sectors are urging lawmakers to act quickly to extend the National Flood Insurance Program before a crucial deadline next week.
The House passed a flood insurance reauthorization and reform bill Nov. 14 by a 237-189 vote. But the Senate Banking Committee has not acted on a flood insurance bill yet. Without an extension, the program will expire on Dec. 8.
"Unless Congress acts now to extend authority before December 8, just eight legislative days away, the NFIP will no longer be able to issue or renew flood insurance policies across the U.S," Elizabeth Mendenhall, president of the National Association of Realtors, said in a Nov. 28 letter to lawmakers.
"There is no flexibility in this December 8 deadline. Congress must either vote to extend the program before then, or it will shut down," Mendenhall wrote.
Senate Banking Committee Chairman Mike Crapo, R-Idaho, and Sherrod Brown, D-Ohio, the ranking member, are still negotiating on a plan, according to committee spokeswoman Amanda Critchfield.
"NAR urges Congress to approve an extension today and avoid exacerbating the uncertainty for taxpayers who rely on the NFIP and the real estate market," Mendenhall wrote.
The American Bankers Association expects Congress to pass some form of an extension of the flood insurance program as part of a continuing resolution to fund the U.S. government after Dec. 8.
"ABA continues to press for a long-term reauthorization while also reiterating that there must be no lapse in program authority," Joseph Pigg, senior vice president at the banker group, said in a statement Thursday.
If Congress misses the Dec. 8 deadline, the National Flood Insurance Program would continue to pay claims and existing policyholders would continue to have coverage, according to R.J. Lehmann, editor-in-chief and senior fellow of the R Street Institute. So expiration in the flood insurance program should not hinder hurricane recovery efforts.
"But if the program’s statutory authority expires, it cannot write any new insurance policies until it is renewed. That means, for homes in a mandatory purchase flood zone, it could be difficult to close on any home sales during an interruption in authorization," Lehmann said in a statement Thursday.
The R Street Institute and the National Association of Realtors are members of the SmarterSafer Coalition, which supports flood insurance reform.
The Realtor group estimates a lapse in the flood insurance program could jeopardize 40,000 home closings per month.
In 2010, when Congress failed to reauthorize the flood insurance program from May 31 to July 2, a survey by the Realtor association survey found that 6% of Realtors had at least one delayed or canceled home sale, amounting to 46,886 transactions during that 33-day period, or 1,421 per day.