Senate Democrats

Senate Democrats Are On Your Side: Protecting Communities At Risk from Natural Disasters

Thousands of communities across our country are at risk from flooding.  Hurricanes, storm surge, and flooding on rivers, lakes and streams can impose real burdens and heartache on families and businesses located in these regions.  Senate Democrats understand that floods are the most common and costly natural disasters in the United States, often causing significant damage to Americans’ most important financial asset and investment – their homes.  That is why we have consistently supported the National Flood Insurance Program (NFIP) – a critical federal program that provides millions of homeowners with affordable insurance to protect against the risk of flood damages.

Unfortunately, Senate Republicans have failed to recognize the importance of this program and the economic security it provides to American families and businesses.  In March, Republicans allowed the NFIP to expire, effectively turning their backs on hundreds of thousands of homeowners, including communities suffering from recent flooding in New England and North Dakota.  The consequences have been devastating.  The Federal Emergency Management Agency (FEMA) estimates that an average of 15,000 families and businesses purchase or renew National Flood Insurance Policies each day.  Therefore, each day that NFIP is not extended, home and business owners in flood risk areas are not able to close on new mortgages and the policies of an estimated 12,600 renewal customers in good standing will lapse, leaving them without coverage even though they have already paid insurance premiums. 

The Continuing Extension Act (H.R.4851) would address these problems and extend NFIP through the end of April.  It is past time that Senate Republicans stop their political posturing and join Senate Democrats to immediately extend the NFIP to provide certainty to families and businesses located in high risk flood zones. 

The National Flood Insurance Program is critical to protecting American homeowners and businesses.  The NFIP, part of FEMA, was created by Congress in 1968 as a response to the inability of families and businesses to secure affordable insurance for flood hazards.  Since that time, the program has grown to include three components:  1) federally-backed flood insurance, 2) floodplain management to minimize the impact of flooding, and 3) flood hazard mapping of communities across the nation.  The NFIP protects homeowners and businesses from excessive and burdensome financial risk from flooding.  Because regular homeowners insurance does not typically cover flood damages, the NFIP fills an enormous gap by providing security and protection to property owners and stability to local economies.  More than 20,000 communities across the country participate in and depend on the resources provided by the program. [FEMA, NFIP Fact sheet, 2010]

Last month’s flooding disasters in New England and North Dakota highlight the importance of this program and the flood insurance relied on by millions of families.  The financial consequences of flooding can be enormous and overwhelming in our already depressed economy.  Last year, flooding in North Dakota required more than $150 million in aid to address damage in the surrounding communities. [FEMA, 12/23/09]

On March 28, the authority of the NFIP to issue flood insurance lapsed due to Republican obstruction.  The expiration of NFIP has had significant and immediate effects.  The NFIP allows homeowners and business owners to purchase affordable flood insurance from the federal government to protect their homes and property.  Because of obstruction by Senate Republicans that allowed the program to expire, the NFIP is no longer allowed to issue new insurance policies to homeowners and others.  These insurance policies are often required by lenders in order for homebuyers and businesses to close on real estate purchases.

Until an extension is passed, the NFIP is also prevented from increasing coverage on existing policies and cannot issue renewal policies. [New York Times, 4/9/10

Millions of families depend on the National Flood Insurance Program.  As of October 2009, there were almost 5.6 million flood insurance policyholders.[FEMA memorandum, 10/27/09]  Americans in many regions of the country, including the Gulf Coast and Mid-West, depend on the availability of flood insurance to protect their homes and businesses.  Since 1969, more than $30 billion in flood insurance claims have been paid by the NFIP to help families and businesses rebuild after damaging floods. [FEMA, FLIP, 2010]  Without this protection, these individuals would be hard-pressed to find affordable and reasonable insurance to protect their homes and businesses from flood damage.

The delay is creating uncertainty for homebuyers in flood hazard regions.  The NFIP identifies areas across the nation most at risk of flooding.  This mapping guides regulations and informs the government’s designation of special flood hazard areas (SFHA).  The majority of flood insurance policies written by the NFIP are for homes and businesses in these flood-prone areas. [RAND, The National Flood Insurance Program’s Market Penetration Rate]

For families and businesses located in flood hazard areas, flood insurance policies are often required to close on real estate purchases.  For families selling their homes or purchasing new homes, the expiration of flood insurance presents a great amount of uncertainty and delay in major financial decisions and commitments. 

The program should be extended immediately to provide certainty to families living in flood hazard areas.  Senate Democrats understand that families and businesses located in high risk flood zones are already concerned about the safety and security of their homes.  These same families should not have to wonder if their home or property will be adequately insured due to the political posturing of Senate Republicans.  At a time of great economic crisis and a depressed housing market, these types of delays are unacceptable and stressful for individuals in the midst of purchasing homes and properties.