Congress Extends Flood Insurance

Washington Editor

Legislation extending the National Flood Insurance Program forfive years has been approved by the House of Representatives and isnow on its way to the President's desk.

By voice vote, the House passed S. 2238, which had earlier beenapproved in the Senate by unanimous consent.

NFIP extension is strongly supported by the insuranceindustry.

The legislation extends NFIP through Sept. 30, 2008, and for thefirst time establishes mitigation procedures requiring homeownerswho have experienced repeated flood damage to take steps aimed atpreventing losses.

Rep. Doug Bereuter, R-Neb., one of the primary sponsors of thelegislation, said in a statement that this will “at last move theNFIP toward a more free-market insurance model by requiring peopleliving in flood-prone areas to reduce their risk or pay higherpremiums.”

Specifically, the legislation allows the Federal EmergencyManagement Agency (FEMA), which administers NFIP, to chargeproperty owners up to 150 percent of current premiums if theyrefuse to take steps to mitigate flood damage.

In addition, the legislation authorizes FEMA to providefinancial assistance to states and communities for taking actionsto mitigate flood damage to repetitive loss properties.

Reproduced from National Underwriter Edition, June 25, 2004.Copyright 2004 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.