(Washington) ‒ Adam Kolton of the National Wildlife Federation, representing SmarterSafer.org, today told the Senate Committee on Banking, Housing and Urban Affairs the National Flood Insurance Program (NFIP) is broken and in need of environmentally responsible, fiscally sound reform that promotes public safety.
Kolton, Executive Director of the National Wildlife Federation’s Advocacy Center, said recent natural disasters underscore the need for NFIP reform that leads to less development and redevelopment in high risk sensitive areas, better land use planning, and significant savings for U.S. taxpayers.
“As we begin to assess the damage from some of the most severe flooding since 1927, it is critical that Congress not miss this opportunity to substantially reform the NFIP to better protect people, property and the environment,” said Kolton. “We urge the Committee to pass a strong, comprehensive reform bill that improves flood risk mapping, ensures risk based rates, and incentivizes mitigation by individuals and communities.”
Accurate, up-to-date mapping based on the best possible science ultimately provides the basis for premiums associated with a property. SmarterSafer.org proposes that Congress create a Technical Advisory Mapping Council that would incorporate true risk and reflect both man-made and natural realities on the ground. This would ensure that maps are accurate and comprehensively designed to assist communities and Federal Emergency Management Agency (FEMA) with high-quality flood hazard identification, insurance rating, and effective flood plain management.
Kolton said the NFIP must charge rates that are based on true risk to reduce the burden on the taxpayer, encourage private sector engagement, and allow market forces to direct development towards higher ground. Currently, NFIP does not charge market-based or risk-based rates, or increase rates based on previous loss experience. The program’s goal of fiscal solvency is defined as charging premiums that will generate enough revenue to cover a historically average loss year, which means catastrophic loss years – such as 2011is likely to be – are left largely out of the equation.
SmarterSafer.org also strongly supports measures that encourage and assist homeowners in taking steps to mitigate damage to protect their homes against natural disasters. Kolton said current NFIP-funded hazard mitigation grant programs have successfully reduced property damage, protected flood plains and reduced the financial burden to the NFIP.
However, he urged Congress to streamline, consolidate and permanently extend the NFIP-funded grant programs under the Flood Mitigation Assistance Program. He said this would reduce bureaucracy and cost and allow FEMA to continue to help communities and property owners reduce flood damage and claims to the NFIP. These cost savings would reduce the program’s burden to taxpayers, safeguard communities, and help restore the fiscal soundness of the NFIP.
Without significant reform, the NFIP could be in danger of eventual collapse. The program is currently $18 billion in debt to the U.S. Treasury, and that amount is likely to increase in the near future as a result of recent flooding. With annual revenues of only $3 billion, FEMA Administrator Craig Fugate recently testified that it will be virtually impossible to repay the debt.
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