With the National Flood Insurance Program (NFIP) due to sunset in September, now is the time to embrace and facilitate the development of a private flood market, say Nicole Austin and Dennis Burke of the Reinsurance Association of America.
To protect their property in the event of a flood, most owners and renters in the US are faced with one option: purchasing flood insurance from the government-run insurance company, the National Flood Insurance Program (NFIP). The NFIP currently provides flood insurance to more than five million policyholders in the US, and its statutory authorisation is scheduled to sunset on September 30, 2017.
US lawmakers in Congress, the administration, policyholders, and stakeholders are largely in agreement that the programme should be reauthorised and are developing legislation reforms to both improve the programme and facilitate private market development, giving consumers additional policy options. It’s not a secret that competition can drive down costs, drive up innovation, and benefit consumers. The Reinsurance Association of America (RAA) is a strong proponent of consumer-centric flood insurance reforms in the US that achieve these goals and utilise globally available risk-sharing mechanisms, such as reinsurance.
The NFIP is more than a government insurance company. It is an important federal programme that encourages communities to undertake actions to defend against flooding through awareness, mitigation, floodplain management, and sound building practices, among other missions. The programme makes flood insurance available to homeowners living in participating communities so that, should all else fail, policyholders have the financial ability to help them recover in the aftermath of a damaging flood.
NFIP, Regulation, Floods, RAA, Nicole Austin, Dennis Burke, North America