GNO Inc., approves of latest effort to extend, reform national flood insurance program

GNO Inc., approves of latest effort to extend, reform national flood insurance program

NEW ORLEANS, La. (WVUE) - As major flooding becomes more frequent in areas that are not along the coast, members of Congress are considering a new bill to extend the National Flood Insurance Program for several years and also help low-income policyholders.

People living in the New Orleans area are no strangers to the risk of flooding. Many, like Uyen Hodgdon, made sure to purchase flood insurance for her home.

"We think that this area has been flooded before, and then we would like to minimize the risk of being flooded and having to pay,” Hodgdon said.

The NFIP, which provides flood coverage to homeowners, renters and businesses has been financially strapped for years. Currently, only 5.1 million policies are in effect nationwide.

And in recent years, Congress has failed to reauthorize the program long-term. Since the 2017 fiscal year, the NFIP has received 12 short-term extensions, according to a congressional committee fact sheet. The latest extension is set to expire in September.

So, the U.S. House Financial Services Committee has before it a bipartisan bill to renew the flood insurance program for five years and reform it in other ways, too.

Rep. Maxine Waters, D-California is the bill’s lead author and chairman of the committee.

"So that we finally bring long-term stability to the millions of homeowners, renters and businesses that rely on the NFIP,” Waters said during a committee meeting Tuesday (June 11).

Greater New Orleans Inc. founded the national Coalition for Sustainable Flood Insurance which includes a number of states.

Michael Hecht, President and CEO of GNO Inc., said a long-term renewal of the NFIP is needed for a number of reasons.

"The first piece of good news about this bill is that it is a five-year renewal,” Hecht said.

Besides providing for a multi-year renewal of the program, the proposed NFIP Reauthorization Act of 2019 creates a five-year “demonstration" program to provide targeted financial assistance to low-income policyholders. Additionally, it repeals surcharges policyholders are currently paying.

Hecht said the bill contains some reforms advocated by the coalition, specifically ones that center around affordability.

“So for example, it repeals the surcharge to homeowners, and it allows for monthly payments, improvements to accuracy,” Hecht said. “It allows for personal flood maps, and also improvement to mitigation. So, this one allows for more money for mitigation compliance from $30,000 up to $60,000 per homeowner.”

In recent years, some in Congress have said people in areas at risk of flooding were paying too little for flood insurance.

Hodgdon said she strongly disagrees and would frown on significantly higher premiums.

"I don’t think it would be fair for us. We would just like to pay to minimize the risk here in this area,” she said.

A huge increase in flood insurance rates could make home ownership not affordable for many people.

Hecht said he believes affordable rates, in addition to reforms to the program, are the right formula for the future.

"We have to make sure that we come up with a program that makes incremental improvements while preserving affordability, and that’s really the balance that has to be struck with flood insurance,” he said.

And, Hecht said he thinks the legislation making headway on Capitol Hill has a good chance of winning approval by Congress.

"Very optimistic, and the reason, of course, is that this bill was developed on a bipartisan basis first and foremost. And second of all, as we’re unfortunately seeing around the country now, on seemingly a monthly basis, flood and weather volatility are hitting everywhere,” Hecht said.

Additionally, he said the long-term answer is more flood mitigation.

“It’s going to be about improving communities and improving homes, so that the actual risk declines on an overall basis,” Hecht stated.

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