Friday, June 29, 2012
Congress Approves Extension of National Flood Insurance Program
WASHINGTON, DC – In an effort to protect Rhode Island homeowners and businesses, U.S. Senator Jack Reed (D-RI) today voted for a bipartisan, five-year reauthorization and reform of the National Flood Insurance Program (NFIP), the federally-backed coverage necessary for some 5.6 million property owners nationwide. NFIP provides coverage protection against property losses that result from flooding in communities that agree to manage their floodplains to reduce potential damage.
All 39 cities and towns across Rhode Island are among the 20,000 flood-prone communities across the country that depend on flood insurance. The NFIP is essential for more than 16,000 Rhode Island homeowners and businesses -- and the real estate market and economy in general.
“In addition to reforming and extending the National Flood Insurance Program for another five years, I am pleased this bipartisan bill includes important provisions to improve flood maps and public notification in order to help inform property owners, civic planners, and emergency management officials of their flood risk. As a result of this bill thousands of Rhode Islanders will be better informed of the risk of flood damage and will have access to flood insurance to protect their homes and businesses. Passing this bill is critical to our economy and to millions of homeowners nationwide,” said Reed, who helped unanimously pass bipartisan flood insurance legislation through the Senate Banking Committee earlier this year.
Senator Reed, who has authored legislation to improve the maps the federal government uses to predict the risk of flooding, led the effort to authorize the National Flood Mapping Program and to establish a Technical Mapping Advisory Council, which were included in the bill. These provisions will help continue the modernization of maps used to designate flood zones.
The NFIP was started in 1969 to fill a void that private insurers were reluctant to fill. It helps address the increasing costs of taxpayer-funded disaster relief for flood victims and the increasing amount of damage caused by floods. The program was largely self-financing until 2005 when it was overwhelmed by claims from hurricanes Katrina and Rita and now owes nearly $18 billion to the U.S. Treasury.
The National Flood Insurance Program allows property owners in participating communities to buy insurance against flood losses from the federal government. More than 5.6 million property owners nationwide rely on the program, including 16,238 in Rhode Island.
The federal program currently covers about $3.9 billion in property in Rhode Island. Since the program’s inception, it has paid out about $81.3 million to Rhode Islanders to cover over 3,700 claims.
The bill now heads to President Obama’s desk to be signed into law.