Las Vegas Review-Journal Senate must act on flood insurance

BY MATT GANNON AND JOSHUA SAKS
SPECIAL TO THE LAS VEGAS REVIEW-JOURNAL

Posted: Apr. 18, 2012 | 2:02 a.m.

If you think significant flooding doesn’t impact Nevada, think again. In 2007, the Silver State had 16,700 National Flood Insurance Program policies in force. That’s more than Wisconsin and Minnesota, which border the Great Lakes and the Mississippi River, as well as flood-prone Iowa, North Dakota and Vermont.

Tens of thousands of Nevadans depend on the NFIP for their safety and to better protect their property and businesses, yet the program is set to expire at the end of May.

Since 1968, the NFIP has been instrumental in protecting America’s families, homes and businesses from financial ruin when flooding occurs. However, the program is in need of major reform to ensure it can continue to safeguard Nevada’s communities and protect the environment. Without significant reform, NFIP will not be sustainable, American taxpayers will continue to be asked to bail out the program and the federal government will continue to subsidize development in hazardous and environmentally sensitive areas.

While Congress is sharply divided on many issues, flood insurance reform receives widespread bipartisan support. The U.S. House of Representatives passed a long-term reauthorization of the NFIP in July by an overwhelming bipartisan vote, and the Senate Banking Committee unanimously reported a similar bill in September. In February, a bipartisan coalition of 41 U.S. senators wrote a letter to Senate Majority Leader Harry Reid urging that legislation be sent to the Senate floor as expeditiously as possible. That bill, however, has yet to be introduced to the full Senate.

If passed, the bill will phase out risky, unwarranted subsidies that have undermined the financial stability of the program; will allow NFIP to purchase reinsurance to help the program pay future claims while protecting taxpayers from these otherwise inevitable costs; will require FEMA to ensure maps are updated and accurate so people understand and can better prepare for their risks; and will streamline and strengthen mitigation programs to help decrease flood risks and strengthen flood-exposed communities and homes and businesses.

These reforms will also ensure that the program no longer encourages harmful development in high-risk areas, which not only puts people and property at risk, but destroys some of the most environmentally sensitive habitats and ecosystems. By reducing the development of these areas, we can reduce flood risk while protecting water quality, allowing underground aquifers to refill and provide valuable open space for hunters and anglers.

Furthermore, Senate action will bring stability to the troubled program. Congress has kicked the can down the road since 2008, passing many short-term extensions.

NFIP was temporarily extended four times in 2011, with the latest extension set to expire on May 31.

Whenever the NFIP lapses, as it has on at least three occasions in the past four years, it becomes nearly impossible to close any real estate deals in flood-prone areas, including the most densely populated parts Nevada. This is simply bad for business in Nevada, which has been hit as hard as any state by the foreclosure crisis. This bill would assure that no more lapses happen during the term of the renewal.

Without reform, the financial condition of NFIP will continue to deteriorate, and tremendous uncertainty will continue to exist for property owners just as Nevada’s economy is showing signs of improvement. There’s no excuse for further delay.

Majority Leader Reid needs to capitalize on bipartisan support for flood insurance reform and bring the bill to the Senate floor.

Matt Gannon is assistant vice president of the National Association of Mutual Insurance Companies. Joshua Saks is senior legislative representative for water at the National Wildlife Federation.