NFIP flood program draws support for extension, mixed views to reform

The National Flood Insurance Program (NFIP), set to expire March 8 without Congressional intervention, appeared set for bi-partisan support for some form of program extension, but with members of the Senate banking commission showing visible divisions over the reforms needed to keep the program affordable, sustainable or perhaps both. 

Affordability and mitigation both appear to be bipartisan mantras, but with party lines re-emerging over the need for deeper program reform and caps on taxpayer liability. 

At a committee hearing on an NFIP extension, the committee’s Democratic chair, Senator Sherrod Brown, spoke empathetically to challenges faced by rural communities at risk and homeowner affordability and argued “we must reauthorise and strengthen the NFIP”.

Select fellow democratic committee members pressed the affordability issue on note that current rate increases had led to NFIP and FEMA projections for major client losses in the program. Rate hikes should be capped in line with a legislative proposal. Debt forgiveness might be leveraged to enable resilience and mitigation investments that might reduce risk towards increased affordability.

The committee’s #2, the senior Republican member Tim Scott, concurred on reauthorisation, but indicated a different understanding of strengthening the program. “Congress cannot allow the NFIP to lapse,” Scott said in opening comments. But a “financially insolvent” and sometimes misguided NFIP “must have substantial reforms”. 

Senator Scott tore into program terms enabling rebuilding in loss-prone zones, claiming that some 30% of NFIP payouts go to 1% of the properties covered suffering continual repeat losses. He has submitted legislation that would curb those trends. 

But Scott also cited operational flaws at NFIP, from outdated flood maps to a lack of transparent data and misfired educational programs, all of which combined to “often obscure the risks”. 

Affordability is also a Republican rally cry. Republican senator John Kenndy backs a plan in reauthorisation legislation by Democratic senator Mendez to cap rate increases at 9%, but might tear apart NFIP to make it feasible. 

“We need a NFIP program that looks like somebody designed it on purpose,” Kennedy said of FEMA’s latest overhaul of program design.

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