Flood insurance program may expire as lawmakers consider reforms
The latest gridlock is causing headaches for insurance companies that partner with FEMA to sell flood insurance policies.
The National Flood Insurance Program, facing a July 31 deadline to reauthorize the program, may expire as members of the House and Senate consider reforming the program. As a result, millions of homes and businesses could lose coverage as hurricane season begins to brew.
Related: Long-term NFIP reauthorization is essential
‘An unsustainable system’
Congress has extended the program six times in the last 10 months, but “some argue that they shouldn’t grant yet another extension without overhauling what many agree has become an unsustainable system,” reports bna.com.
Without reauthorization before the deadline, the program would be unable to issue new flood insurance policies and would operate reduced borrowing authority, but would still be able to pay claims to current policyholders, according to rollcall.com.
Related: Moody’s reveals forecast for this year’s hurricane season
Insurers need answers
The latest gridlock is causing headaches for companies like Allstate Corp. and Farmers Insurance Group, among others, that partner with the Federal Emergency Management Agency to sell flood insurance policies. They have been pushing Congress to overhaul the program, rather than keep extending its expiration date.
For representatives of states like Florida and Louisiana — two states which are frequently impacted by hurricanes — there is growing concern to remedy a short- or long-term solution for the financially-troubled program.
Related: Hurricane-proof homes are real. Why isn’t anyone buying them?