Capitol Report: Congress just dodged hard decisions about flood insurance again

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A federal flood insurance program that’s the only option for many homeowners in areas threatened by water damage was extended Tuesday with none of the reforms many observers call necessary.

The Senate voted to reauthorize the National Flood Insurance Program for four months even though a broad group of environmentalists, housing industry participants, and advocates of lean government all want to see big changes to the program. President Donald Trump signed the bill into law Tuesday afternoon.

The NFIP, which is administered by the Federal Emergency Management Agency, offers insurance policies for homeowners in areas where it’s required by mortgage lenders, and where there are few or no other private-market alternatives.

See: Hurricane season bears down — with 7 million homes at risk and a flood insurance program set to expire

It has been criticized for setting insurance rates that are much lower than the risk posed to the property, thanks to the government subsidy. And many groups want to see taxpayer money used for efforts that would mitigate the effects of flooding, rather than provide bare-bones protection to continue to allow homeowners to live in risky areas.

“We’re disappointed to see Congress punt yet again on vitally needed reforms to the NFIP,” said Rachel Cleetus, lead economist and policy director with the Climate and Energy Program at the Union of Concerned Scientists.

The National Association of Realtors said, “We applaud lawmakers for taking this needed action to prevent disruptions to closings in thousands of communities across the country.” But the group added, “the NFIP is in desperate need of reforms that will make it solvent and sustainable in the long term. The National Association of Realtors will continue fighting for these reforms as the next NFIP reauthorization discussions loom later this year.”

UCS last month released a report showing that hundreds of thousands of homes are at risk not just of flooding, but of “chronic” inundations as sea levels rise over the coming decades. The graphic above shows some of their projections.

After last year’s massive hurricanes, more than 95,000 NFIP policyholders submitted claims totaling about $8.7 billion, according to a tally from FEMA.

Cleetus acknowledges that Congress has demonstrated bipartisan interest in reform “and an understanding that the program as it currently stands is not serving the public or the taxpayer,” she told MarketWatch.

Still, as yet another hurricane season gathers force, the UCS and other groups ranging from the National Association of Realtors to the Pew Charitable Trusts hope lawmakers will use the next few months to make the hard decisions about the NFIP that will offer some assistance to affected homeowners without draining taxpayer resources too much.

Also read: Only 14% of the 3 million households hit by Irma have flood insurance