What effect does the newly signed Disaster Relief Bill have on the 50-year old NFIP program?

Basically, it allows for the 12th short-term extension of the National Flood Insurance Program (NFIP) since 2017.  The 10th extension was approved on December 21, 2018, which carried the program until May 31st 2019.  The 11th was the 2-week extension passed one day before the program was set to expire a week ago on May 31st.

The long-anticipated disaster-aid package was finally signed into law yesterday, June 6th after much delay.  The hold-up caused concern for many property owners who were already affected by recent wildfires, hurricanes, floods, and tornadoes, as the 2019 Hurricane Season kicked off on June 1st. This $19.1 billion emergency supplemental bill provides disaster relief to those affected by catastrophic storms in 2018 and 2019 (H.R. 2157), such as Puerto Rico.  Among that many programs this bill will help to fund, it also gives the NFIP a little breathing room by extending the program until September 30th 2019.

With this extension, it’s worth mentioning that the program is celebrating its golden anniversary. In 1968 Congress enacted the National Flood Insurance Act after the devastating effects following numerous floods and hurricanes. The NFIP was created to provide an insurance alternative to disaster assistance. According to the Federal Emergency Management Agency (FEMA) the program reduces the impact of flooding on private and public structures by providing affordable insurance to property owners, renters, and businesses, as well as by encouraging communities to adopt and enforce floodplain management regulations.

The NFIP is more than an insurance program, it has helped over twenty-thousand communities develop floodplain regulations and implement a floodplain management program. The NFIP helps people avoid building in risky areas, which decreases flood losses and protects critical habitat and recreational opportunities. People working with the NFIP are passionate about floodplains and mitigation. Within its 50 years, more than 22,300 communities have adopted building criteria for floodplains and over 5.1 million individuals are protecting $1.3 trillion in assets.\

The Federal Emergency Management Agency (FEMA) released its five-year strategic plan last year and one of the goals is to “build a culture of preparedness.” Two objectives within the goal are to incentivize mitigation (loss reduction) investments to reduce risk as well as disaster costs, and to close the insurance gap. FEMA’s goal for closing the insurance gap is to have more people in risky areas purchase flood and hurricane insurance. The data and flood mapping the NFIP produces are foundational elements for FEMA to achieve this goal and these objectives.

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