For Immediate Release
SmarterSafer.org today praised the Senate Banking Committee for taking quick action to make the National Flood Insurance Program (NFIP) financially viable and better able to protect Americans from future disasters after today’s markup of the legislation. The coalition said the Committee’s bill significantly improves the flood program and urged the full U.S. Senate to vote on the legislation before it expires on Sept. 30.
“The Committee took several important steps towards creating a sustainable, workable national flood insurance program,” said Eli Lehrer, National Director of the Center on Finance, Insurance, and Real Estate at the Heartland Institute. “While the bill could certainly use some improvements and, by itself, won’t save NFIP, it’s a good deal better than what we have now.”
The NFIP is in serious need of reform. The program is currently $18 billion in debt and that number will likely grow as a result of recent flooding and Hurricane Irene. If NFIP is to continue to provide needed protection to millions of Americans in harm’s way, the program must be put on sound financial footing.
“By reporting the Flood Insurance Reform Act, the Senate took a step towards better protecting people, property and the environment,” said Joshua Saks, senior legislative representative for water at the National Wildlife Federation. “The new rate structure in this bill provides a market force to move development to higher ground and out of harm’s way, while protecting valuable ecosystem services at the same time.”
SmarterSafer.org has proposed that all insurance rates be risk-based within five years. Accurate mapping that shows true risk is critical to ensuring these risk-based rates are correct, which will help move people and property out of harm’s way while protecting the environment.
“We commend the Senate Banking Committee’s passage of the Flood Insurance Reform and Modernization Act of 2011 because it brings badly needed reforms to the National Flood Insurance Program (NFIP) that will help to safeguard American communities and the rivers they depend on,” said Shana Udvardy, Director of Flood Management Policy for American Rivers. “As we witnessed record breaking flooding this past spring and summer on the Mississippi and Missouri Rivers and as we are witnessing devastating flooding from New Jersey to Vermont, the Senate’s leadership couldn’t come at a better time. The bill will ensure that flood insurance rates reflect actual risk of flooding, raise awareness of the risk of living behind levees and dams, and will incentivize moving people out of harm’s way allowing more room for the river.”
The coalition said disaster mitigation would improve safety and end up saving taxpayers money. For every $1 spent on disaster mitigation, $4 is saved because less clean up and rebuilding would be necessary after a disaster. In addition, mitigation measures have saved more than 200 lives between 1993 and 2003 and prevented 4,700 injuries over 50 years.
In addition, reinsurance within the NFIP would prove to be a valuable capital management tool for insurers. This vital risk management instrument – insurance for insurers – helps insurance companies improve their capacity and financial performance, enhance financial security, and reduce financial volatility.
In July, the U.S. House of Representatives passed legislation to reauthorize the NFIP until Sept. 30, 2016 on an overwhelming bipartisan vote of 406-22. The current legislation is set to expire on Sept. 30 this year.
SmarterSafer.org is a national coalition made up of a diverse set of voices united to support environmentally-responsible, fiscally-sound approaches that promote public safety. The Coalition strongly opposes legislative proposals that encourage people to build homes in hurricane-prone, environmentally-sensitive areas by creating new programs that directly or indirectly subsidize their homeowner’s insurance.
# # #
Contact: Matt Englehart