Flood insurance program reauthorization overshadowed by jobs, student loans


When President Barack Obama recently signed a massive, job-creating transportation bill, which also held down interest rates on student loans, the bill also extended the National Flood Insurance Program (NFIP) through Sept. 30, 2017.

Unusually bi-partisan HR 4348, the so-called “Transportation and Student Loan Interest Rate” bill, will provide $105 billion in transportation infrastructure spending, make or save 3 million jobs, prevent interest rates from doubling on 7.4 million student loans and help protect the homes of some 5.6 million property owners who buy the coverage and others who need it.

Coverage of the NFIP extension has been overshadowed by the larger issues of jobs and student loan costs, but the extension wasn’t lost on the National Association of Home Builders (NAHB).

“NAHB has been working tirelessly to make sure that this vital program, which was set to expire on July 31, was reauthorized for five years to ensure that the federally-backed flood insurance program operates smoothly and without delay, remains efficient and effective in protecting property owners, and creates more stability in the housing market,” said NAHB Chairman Barry Rutenberg, who says the program also has a job-saving component.

Over the past few years, the NFIP has experienced several short-term lapses in authorization, forcing builders to stop or delay construction on new homes due to the lack of flood insurance approval, resulting in unnecessary delays and job losses.

Ruttenbert also said, in other instances, the program’s uncertainty has at times caused home buyers to delay or cancel closings due to the inability to obtain NFIP insurance for a mortgage.

Established in 1968, the NFIP offers affordable flood insurance to home owners and businesses in flood plains and other low-lying areas that otherwise might not be able to obtain coverage.

More than 20,000 communities nationwide participate in the insurance program.

Federally-insured loans mandate NFIP coverage for homes in special, designated high-risk Special Flood Hazard Area (SFHA), but as last year’s Hurricane Irene and this year’s Tropical Storm Debby revealed, floods aren’t limited to coastal areas and flood plains.

Floods and flash floods happen in all 50 states. While you may not live in an SFHA, given the nation’s network of waterways and snow coverage areas, everyone lives in a potential flood zone, according to NFIP.

That’s often because of a condition called the “storm surge.”

Also see DeadlineNews.Com on Forbes: “Flood Insurance: Protection Against Storm Surge”

A “storm surge,” is an abnormal rise in water levels generated by storm winds. The sudden rise in water levels can lead to flooding, including flash-flooding, according to the National Weather Service.

Nearly 4 million homes are at risk for storm surge and an estimated one in four of those homes are in moderate- to low-risk areas where homes may not require the coverage, according to CoreLogic’s annual Storm Surge Report.

Those homes, however, may need NFIP coverage to recover from flood losses.

Just a six-inch flood can cause $20,000 in damage to a 1,000 square foot home, according to NFIP’s interactive Cost of Flooding app. Another six inches raises the total to $27,150. That would be $52,220 on a 2,000 square foot home.

Before you decide not to buy coverage, because you don’t live in an SFHA area, get smart, check out the NFIP’s FloodSmart.gov web site to get all the facts.

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