U.S. House extends flood insurance program. Will Senate act by July 31 deadline?

OCTAVIO JONES   |   Times 
A street along Hogan's Creek near downtown Jacksonville sustained flooding which surrounded Confederate Park because of Hurricane Irma.
OCTAVIO JONES | Times A street along Hogan's Creek near downtown Jacksonville sustained flooding which surrounded Confederate Park because of Hurricane Irma.
Published July 25 2018
Updated July 25 2018

Just days before the latest National Flood Insurance Program extension was set to expire, the U.S. House of Representatives on Wednesday approved another extension for the program.

Whether the U.S. Senate will act quickly enough to pass it before the July 31 deadline expires a week from now, however, remains to be seen.

The federal program is the main avenue for homeowners to buy flood insurance.

"This bill keeps flood insurance strong and clean through hurricane season for Pinellas families and I urge my colleagues in the Senate to also pass it without delay," U.S. Rep. Charlie Crist, D-St. Petersburg, said in a statement. "Allowing the National Flood Insurance Program’s authorization to lapse would devastate communities like Pinellas."

By passing the extension, Congress would keep the program running through Nov. 30. This would be the program’s seventh short-term extension in recent months.

"This program is badly in need of reform, but letting it expire in the meantime would leave millions of people vulnerable to financial catastrophe smack in the middle of hurricane season," Sen. Marco Rubio, R-Miami, tweeted this week. "We need to get this done ASAP."

Sen. Bill Nelson also supports the legislation.

Stakeholders have been anxiously awaiting movement on the issue. Many hoped that Congress would approve a long-term extension for at least five years. The proposed short-term extension leaves homeowners facing the same two options: another extension must pass, or the program lapses.

A lapse is the worst-case scenario, because then new flood insurance policies would not be written until Congress finally deals with the issue. This would most affect new homeowners looking for coverage. But current homeowners whose policies expire after July 31 would also be impacted because they wouldn’t be able to renew their policies.

In the Tampa Bay region, this could particularly affect home sales in areas prone to flooding. Coastal Pinellas County is home to some of the most-affected properties when it comes to flood insurance. The majority of homeowners in St. Petersburg’s Shore Acres, for example, qualify for subsidized rates under the NFIP.

Previous coverage: Calm before the storm: Flood insurance could get messy over summer>

Many who are closely watching the flood insurance issue had hoped for more expansive changes than just another temporary reauthorization.

"It is disheartening that our representatives have once again declined to enact much needed reforms to NFIP," said SmarterSafer, a coalition pushing for NFIP reform, in a statement. "We urge Congress to use the next four months to create a comprehensive legislative package that (ensures) that the program better protects people in harm’s way, the environment and taxpayers.’’

One of the key changes many in the private insurance market, as well as consumer advocates, are pushing for is allowing private insurer coverage to satisfy mortgages’ mandatory insurance requirements.

Currently, if a homeowner who receives subsidized rates under the NFIP tries to leave for coverage in the private market, they would not be able to get that same subsidized rate if they decide to return.

Many mortgages require that a home be covered by flood insurance — but that only counts if the coverage is continuous and through the NFIP. That means the homeowner’s time in the private market would be counted as a lapse, bringing with it a hefty rate hike.

The affordability of policies is also a concern, as premiums inch up each year. Congress could also solve this program by extending the program for a much longer period of time.

"Looking past this short-term extension, we have got to get serious about a thoughtful and comprehensive long-term reauthorization that addresses sustainability, accessibility, and affordability," Crist said. "It’s long past time for Congress to get affordable flood insurance done for the people."

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Times staff writer Alex Leary contributed to this report. The reporter can be reached at [email protected] or (727) 892-2249. Follow @malenacarollo.

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