WASHINGTON, DC – With the Atlantic hurricane season approaching, U.S. Senator Jack Reed says now is not the time to let the National Flood Insurance Program (NFIP) expire.  He is urging Congress to take swift action to extend the program before it lapses on July 31st.

Senator Reed says that during a lapse in the NFIP program, new policies cannot be issued -- which could prevent homes in flood-prone areas from being sold, since they are required to carry flood insurance to secure a federally-backed mortgage -- and existing policies cannot be renewed.  And if a major disaster struck, it could also mean the Federal Emergency Management Agency (FEMA) would be unable to pay the claims of current policyholders because FEMA wouldn’t be permitted to borrow from the U.S. Treasury.

Yesterday, the U.S. House of Representatives passed a short-term fix to extend flood insurance funding through the end of November.  Senator Reed says the Senate needs to act now, before the July 31 deadline, to prevent homeowners and communities from being negatively impacted.

“The National Flood Insurance Program is vital to protecting Rhode Island homeowners, businesses, and property throughout the state.  Families shouldn’t have uncertainty hanging over their heads because Congress failed to get its work done on time.  Congress must address this issue now to prevent flood insurance from lapsing as it works out a long-term extension and needed reforms,” said Senator Reed, who recently joined his Senate colleagues in passing the 2018 Farm Bill, which included a provision to extend the NFIP until January 31, 2019.  “I urge Majority Leader McConnell to quickly bring up a clean, short-term flood insurance extension to ensure the program remains available to those who need it.  And Congress must work together to provide a comprehensive, long-term reauthorization that will ensure property owners know their flood risk and have an appropriately priced but affordable way to insure against it, as well as options and incentives to mitigate their risk.”

According to FEMA, flooding is the most common natural disaster in the United States.

NFIP was originally established in 1968 and today there are 5.1 million policyholders nationwide, including about 15,000 policies in force in Rhode Island.  The program provides about $1.3 trillion in coverage for 90 percent of the U.S. flood insurance market and seeks to combat the effects of flooding through four interrelated components:

  • Flood insurance - to help property owners recover quickly after a flood and reduce the need for federal emergency appropriations;
  • Floodplain management - to minimize damage to people and property through the adoption of local ordinances and building codes;
  • Floodplain mapping - to identify flood hazards and communicate that risk to homeowners and communities; and
  • Mitigation - to help remove property from harm’s way through property-level and community investments that reduce our overall level of flood risk.

To help reduce the high cost of flood damage, Senator Reed introduced the bipartisan State Flood Mitigation Revolving Fund Act along with Senator John Kennedy (R-LA).

The State Flood Mitigation Revolving Fund Act would establish a state-revolving loan program to fund mitigation projects for homeowners, businesses, and communities to strengthen anti-flood measures and preparations.  By helping states to fund activities such as home elevations, flood proofing, acquisitions, and environmental restorations, of 2017 would also provide an avenue to help middle-income and low-income property owners reduce their flood insurance premiums.

Flood mitigation experts note that the most effective flood mitigation techniques are done in a proactive – and not reactive – manner.  Accordingly, the State Flood Mitigation Revolving Fund Act calls for developing and implementing a straightforward and easily accessible program through which states can offer low-interest loans to homeowners, businesses, and communities for anti-flood measures.

“This legislation would help protect our communities from the dangers of flood disasters and ensure that new efforts are taken to mitigate the serious risks to life and property we face from floods in Rhode Island and across the nation,” said Senator Reed, a senior member of the Appropriations Committee. “Revolving loan programs are a time-tested way to tackle infrastructure challenges, and this bill would especially help low- and middle-income property owners counter disastrous consequences of floods by lowering flood insurance premiums.  Congress must work together to help bolster proactive efforts to reduce the threats of flood disasters.”