Late last week President Joe Biden signed legislation passed by Congress to extend the National Flood Insurance Program’s authorization to Dec. 16, 2022.
“NFIP reauthorization is an opportunity for Congress to take bold steps to reduce the complexity of the program and strengthen the NFIP’s financial framework so that the program can continue helping individuals and communities take the critical step of securing flood insurance,” said the program’s administrator, the Federal Emergency Management Agency, in a statement.
FEMA said it would still have authority to make payment on valid claims with available funds if NFIP lapsed, but policies would have stopped being sold or renewed. This would have disrupted tens of thousands of home sales, FEMA said.
The extension comes just as residents in Florida and the Carolinas deal with significant storm surge from Hurricane Ian. However, the flood insurance take-up rate for residential properties in Florida is low, according to a recent report from Verisk Extreme Event Solutions. Storm surge is not covered by a standard homeowners policy.
“The level of damage from recent catastrophic storms makes it clear that FEMA needs a holistic plan to ready the nation for managing the cost of flooding under the NFIP,” FEMA said.
RIMS said the reauthorized NFIP bill “provides critical financial support to coastal properties, as well as many commercial and residential properties located in flood zones across the United States.”
“The extension not only allows these properties to remain financially protected, it also enables them to remain compliant with strictly enforced insurance mandates found in real estate contracts.”