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National Flood Insurance Program


​​​Commonly known as the NFIP, the National Flood Insurance Program is the largest insurer of flood risk in the nation. If your community association has a flood insurance policy, it's most likely an NFIP policy.

The NFIP is not a permanent federal government program. Congress typically votes every 5 years to extend NFIP's authority to sell insurance policies. The NFIP's current authorization expires on July 31.

Congress is working to reauthorize the NFIP, but the legislation to do this has become mired in controversy. The House of Representatives has already passed legislation to reauthorize beyond July 31st, but numerous Senators oppose the House legislation. H.R. 2874 The Senate needs to support meaningful reform and multi-year reauthorization. The NFIP is almost $25 billion in debt and never recovered from losses incurred from hurricane Katrina in 2005 and Super Storm Sandy in 2013. More recently, hurricanes Harvey, Irma, and Maria forced Congress to forgive $16 billion of NFIP's debt so claims could be paid.

Reformers in Congress point to the $25 billion debt as unmistakable evidence that premiums are underpriced and must be increased. Others counter higher premiums reduce the number NFIP policies, thereby directly increasing federal spending on disaster relief.

In addition to this debate over premiums, there remain controversies over the accuracy of federal flood maps, NFIP claims processing, and the emergence of private flood insurance policies.

These controversies have led to a recent series of short-term NFIP extensions with Congress even allowing the NFIP to expire for several days during the recent federal government shutdown.

When the NFIP expires no new policies may be sold and no existing policies may be renewed. This raises the possibility of uninsured flood losses for community associations and homeowners.

At this point in time, NFIP has been reauthorized until July 31, 2018. Community association homeowners face the possibility of devastating underinsured and/or uninsured losses if NFIP's statutory authority expires and a lapse ensures. 

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