Why You Should Care About Reauthorizing the National Flood Insurance Program


What is the National Flood Insurance Program?

The National Flood Insurance Program (NFIP) is a government run program what was created to provide incentives for communities to rebuild to higher standards and steer development away from flood zones. In 1929, the private insurance industry abandoned coverage for flood loses after numerous natural disasters*. This created a void in flood insurance coverage for homeowners. Over time, the federal government instituted a number of bills that provided flood insurance to homeowners. These programs evolved into what is now known as the National Flood Insurance Program. The program must be reauthorized by Congress every 5 years, and the deadline is soon approaching. 

Has Congress started the reauthorization process?

The answer to that question is both yes and no. In the House of Representatives, the House Financial Services Committee has passed seven different bills to date. Each bill addresses a different component of the NFIP. The National Association of Realtors® supported six of the seven bills. NAR is currently opposed to this package from the House as it is presented for a multitude of reasons:

  1. The bill does not grandfather property owners' current insurance rates once new flood maps are produced. Rates on currently grandfathered properties would increase by 8% annually until they reach full risk rates.
  2. The bill fails to provide an analysis of the total cost of flood insurance to property owners. This is due to new fees and policy provisions in the bills.
  3. There are concerns that the package does not provide for accurate flood mapping; a crucial element that will ensure property owners are being charged accurate rates for their risk exposure.

The Senate has numerous bi-partisan bills working their way through the process, but NAR is still working with Senators and has not taken an official position on any of the bills.

As a Realtor®, why should I care if it gets reauthorized?


You should care because it could directly affect one of your customers! If the NFIP is not reauthorized by the September 30, 2017 deadline, it is estimated that 40,000 property sales per month will not close. Without reauthorization, the NFIP cannot issue or renew policies in 22,000 communities across the U.S. where flood insurance is required for a mortgage.

Now I understand how important this is to Realtors®. How can I help? 

The most important step you can take is clicking the button below to respond to NAR's National Flood Insurance Program call for action. This is a pre-written email with all the necessary information. Just insert your name, address and the page will fill everything out for you. How much easier could we make it for you to be a Realtor® advocate?