Saturday, July 21, 2018 | 2 a.m.
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Catastrophic storms have hit communities hard in recent years, which should serve as a reminder that Congress must do more to protect people and property in harm’s way. A crucial first step is for lawmakers to fix the nation’s ailing flood insurance program.
More than 12,000 property owners in Nevada, including at least 1,400 in Clark County, rely on the National Flood Insurance Program for flood coverage because it is basically the only policy mortgage lenders can accept to meet the federal government’s mandatory purchase requirement. Unfortunately, the outdated program has been hit with wave after wave of claims after major disasters strike, and has been forced to borrow more than $36 billion from U.S. taxpayers.
The program has remained afloat through a series of short-term extensions that resulted in it lapsing twice, leaving many prospective property owners unable to purchase the flood insurance required to close on some homes. The program now must be extended before it expires July 31.
With the next deadline approaching and an active hurricane season nearing, lawmakers cannot continue juggling temporary patches to the program that leave the housing market vulnerable to additional disruptions. The Senate must act by overhauling the program, and it should start by advancing a legislative package similar to the 21st Century Flood Reform Act that passed in the House of Representatives last fall.
A critical aspect of the House bill is a measure championed by Sen. Dean Heller, R-Nev., that gives consumers choice by allowing private-sector competition in the flood insurance marketplace. That could potentially lead to more affordable rates and higher coverage limits than the one-size-fits-all national program, lowering premiums for many policyholders.
Heller’s bill also would help ensure that property owners have ongoing access to flood insurance, even when the national program is temporarily unavailable due to slowed bureaucracy of the federal government. A recent study by the consulting firm Milliman found that a vast majority of homeowners could see their flood insurance premiums reduced if Congress passed this technical correction to the current federal flood law.
With hurricane season less than a month away and the current program set to expire before a lengthy congressional recess, Congress should pass Heller’s reform, along with several others that would help solidify the program’s viability for years to come.
One critical reform is to ensure that the Federal Emergency Management Agency updates its antiquated flood maps. By using the most accurate risk-assessment tools and modern technologies, FEMA can give property owners an accurate picture of how vulnerable their property is to flooding and guarantee that rates accurately reflect the risk a property faces.
Mitigation efforts should also be incentivized, rather than disaster programs paying for storm cleanup after the fact. A recent study showed that every $1 spent toward mitigation before a storm saves $6 in disaster recovery. Investing in mitigation efforts could save the federal government and taxpayers billions of dollars and help safeguard the program for future generations.
Major storms and natural disasters are not going to let up any time soon, and the National Flood Insurance Program has been failing for well over a decade. Flooding is the most common natural disaster nationwide, so it is time to reform the program and finally protect consumers in Nevada and across the nation.
Heidi Kasama is president of the Nevada Realtors and a member of SmarterSafer, a coalition focused on federal disaster policy.
