Flood insurance extended, but program $20B in red


On Tuesday Congress extended the National Flood Insurance program for another four months, avoiding a lapse in insurance for millions of Americans during hurricane season, but also kicking the can down the road on a fiscally struggling program.

“It wasn’t what we were looking for, but we’ll take what we can get,” said Joe Luca, the president of the Rhode Island Association of Realtors. “Hopefully in the meantime some members of Congress will put together a plan to revamp the whole system.”

The House of Representatives voted in favor of reauthorization last week, and on Tuesday night the Senate followed suit by the margin of 86-12.

Both Senator Jack Reed and Senator Sheldon Whitehouse cast yea votes.

The bill extends the program until November 30, after hurricane season is over. NFIP is currently in dire financial condition, with over $20 billion in debt and premiums that don’t come close to covering the amount of claims.

“This short-term flood insurance extension will help prevent businesses, renters, & homeowners from being left in the lurch during peak of Atlantic hurricane season,” said Senator Reed in a tweet on Tuesday. “Now Congress must get to work on a bipartisan, long-term fix.”

President Trump is expected to sign the legislation into law soon.

While not necessary now that the NFIP extension legislation was approved, the Rhode Island Department of Business Regulation was ready to help Rhode Islanders find flood insurance were the federal program to lapse.

In a statement received after press time on Monday, Brian Hodges, spokesman for RI Department of Business Regulation, said: “If the federal program is not extended, the Rhode Island Department of Business Regulation is prepared to provide a list of private carriers that offer flood insurance. (Consumers looking to purchase flood insurance should reach out to their insurance agents to determine if their risk may be insured by a private insurer.) Our office has worked to make flood insurance more readily available, and we are aware of its importance to our citizens.”

In the long-term a number of NFIP reform bills are sitting in Congress, waiting to break through the deadlock.

“We want NFIP to be self-sufficient in the long run,” said Luca.


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Thanks to Senators Reed and Whitehouse, the flood insurance program has been extended but I don't believe Joe Luca will ever get his wish of the NFIP becoming self-sufficient. Flood insurance premiums will continue to increase and congress needs to subsidize it permanently until and unless FNMA, FHLMC, FHA, and VA start requiring less costly coverage for their mortgages. Fortunately, there are several choices today that didn't exist just a few years ago. I strongly recommend that anyone needing it google "cheap flood insurance". It won't hurt to learn if there are less expensive carriers. The issue is similar to Workers Compensation Insurance. When there was only The Beacon in Rhode Island the premiums were sky high. (I know. I paid them.) Those premiums dropped dramatically when competition re-entered the R.I. market.

Happy August everyone.

Rick Corrente

The Taxpayers Mayor

Thursday, August 2, 2018