Federal flood insurance officials are urging Congress to renew the federal program.
The National Flood Insurance Program is scheduled to expire on May 31 unless Congress acts, in advance, to reauthorize it.
“Without reauthorization, the NFIP will be unable to issue new policies, renew existing policies, or modify policies to increase coverage on the existing policy.” said David Miller, associate administrator for FEMA’s Federal Insurance and Mitigation Administration. “Reauthorizing the National Flood Insurance Program is the prudent thing to do. “
Congress has traditionally extended the program for five year periods; however, for the last few years Congress had only extended the program for short periods, mostly from 30 days to six months.
FEMA is urging Congress to support a two year reauthorization.
The private insurance, real estate and homebuilding industries generally support a long-term reauthorization along with reforms.
The National Association of REALTORS estimates that a lapse in authorization jeopardizes an estimated 40,000 mortgage closings per month for individuals purchasing property mapped in a special flood hazard area.
In addition, the NFIP said that if it experiences a lapse in authorization, the cash flow into the program from premiums will diminish, and the NFIP may have to halt payment of claims for survivors who have recently experienced flooding, including those impacted by recent hurricanes Irene and Lee.
The program has more than 5.6 million policyholders and is in debt about $18 billion.