Reforms needed in Flood Insurance Program
The tragic flooding that occurred last week should be a reminder that unless the federal flood program overflowing with debts, is reformed by the Congress, above 250,000 residents of California will be unable to rebuild, after the next calamity
The insurance coverage provided by the National Flood Insurance Program (NFIP) to about 22,000 neighborhoods throughout the country was hit with several waves of enormous payouts for several tornadoes, hurricanes, floods. This program has accumulated tax payer’s debt up to over $25 billion without any way out.
A perfect solution around the corner is to allow private insurers into the flood insurance sector and allow consumers to select suitable policies that fit the risk associated with their flood problems.
Allowing private insurers to provide the NFIP suitable flood insurance policies will make insurance coverage more affordable as consumers will have multiple options to patronize different insurance competitors.
A research carried out by the Wharton school discovered that the insurance rates of many insurance holders would be reduced when private insurance bodies are introduced into the program and boost the insurance coverage for others.
Integrating the option for private insurers in the program will also limit the reliance of consumers on NFIP. This will also enable the program to cater to the properties that are not properly insured by the private market to have an option of a last resort.
Benefits derived from NFIP is the ability to concentrate efforts in mitigating communities that are very liable to flooding.
The House of Representatives in the preceding year implemented a very significant step towards reforming the NFIP by enacting the Flood Insurance Market Parity and Modernization Act.
The bill would have enabled states to regulate private insurance providers to boost the growth of the flood insurance sector, but the issue was not looked into before adjournment.
Apart from allowing private insurance providers in the flood insurance program, an extensive proposal was provided by the SmartSafer coalition, which describes additional steps that can be taken by the Congress to ascertain the success of the flood insurance program in the long run.
A suggestion is to make sure that advanced technology and precise tools for evaluation are integrated into analyzing flood maps. The pressure associated with discovering the possibilities of the flood is therefore removed from the homeowner.
The House of Representatives in the preceding year implemented a very significant step towards reforming the NFIP by enacting the Flood Insurance Market Parity and Modernization Act.Adequate mapping will allow private insurance providers and the NFIP to determine appropriate insurance rates that depend on accurate estimations of the chances of flooding of a property.
Rates that are based on risks should collaborate with appropriate rewards that would limit the chances of storm damage. For instance, financial help should be offered by the NFIP to policyholders on a reduced income to get ready for any future storm.
Putting adequate efforts into environmental friendly mitigations at the community level will help in making sure that the effects of future storms are well prepared for by homeowners. Implementing proactive measures will undoubtedly prevent the destruction of lives and properties.
San Jose has been hit hard by the storm and there is no end in sight for this city and other places in the country. However, Congress is having just a limited time to implement NFIP reforms before the expiration of the program.
Flood victims will be in dire straits if the Congress fails!