Discussion of debt could endanger the National flood insurance program

Jacob Dirr

The countdown to the National flood insurance program.

There are growing concerns that the debate of federal debt, which has drawn legislators in the political war on federal spending, could be bad for the flood insurance program. Program is set to expire on 30 September. Congress must periodically renew the program, which has more than 5.6 million subscribers.

The National flood insurance program provides home, tenant and insurance of flood in more than 21 000 communities nationwide.

Program "is beating as one".

With the greatest threat of the crisis of debt, the flood insurance program is getting "beaten as a can on the street," said Marguerite Tortorello, a spokesman for the Property Casualty insurers Association of America, who lobbied for the interests of insurance.

Earlier this year, the House overwhelmingly adopted a five year extension of the program of insurance against flooding, with the broad support of Republicans and Democrats.

Now, the U.S. Senate Banking Committee is finalizing its flood insurance legislation, although it has been "delayed at least a week and could be postponed to early September," according to PropertyCasualty360.com. Congress is expected to make a break 8 August to 5 September.

A staff member of the Senate Banking Committee who refused to be identified, said the Committee is working on the passage of a temporary extension (two months to one year) before the flood insurance program is set to expire on 30 September.

"Too big to fail".

Terry Tyson, President of Flood Insurance Smart, says that, after 30 years to sell a flood of insurance, he thinks that the flood insurance program has become "too big to fail". The program is important because any House mortgaged in a flood zone is required by federal law to carry flood insurance.

"Flood program is so closely linked with the world of the mortgage, I couldn't imagine what it would be if they close the program," said Tyson.

Tortorello, the spokesman of the Association of insurers casualty property, said expiration of the program would cause insurance companies to start the notice of termination of postal cover and could derail sales closures.

Without the National flood insurance program, owners can obtain flood insurance and that private companies may seek policy low risk, "the riskiest become" almost unaffordable, Tyson said.

Tyson advice for homeowners, renters and business owners have flood insurance: don't worry. "Followed as it is;" He will return to the books, "said Tyson. "Just wait it.".

An expiration of the flood insurance program is not without precedent. Last year, the program has expired for a total of 53 days. When it was finally relaunched, the coverage was applied retroactively to these 53 days.

Program of swimming in debt

The National flood insurance program was created in response to the increase in the costs of assistance to the victims of the floods; It is managed by Federal Emergency Management Agency (FEMA). Through the program, private insurance companies write and manage fonts insurance flood supported by the Federal Government under their own brands. Any carrier issues flood insurance, coverage, rates and conditions are the same.

The program, funded by Federal borrowing, is almost 18 billion dollars in debt.

Flood policy average cost about $600 in 2010, but the average total paid over the past five years has been close to $34,000, according to federal data.

A house in flood insurance program can be insured up to $ 250,000 and its contents for up to $100,000, according to figures from the FEMA from 2010. Tenants can cover their property up to $100,000. Commercial property owners can provide a building for up to $500,000 and its contents up to $500,000.

FEMA officials refused to comment on the expiry in anticipation of the flood insurance program and transmitted requests for interview to the leaders of the Congress. Leaders of the Congress could also be reached for comment.

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House passes overhaul of indebted National Flood program of insurance

John Egan

Home at United States July 12 adopted a law that would extend the life of the National program of insurance for five years while also progressively subsidized flood taxpayer of insurance premiums and opening the way for private companies sell flood insurance.

Supporters say that HR 1309 could strengthen the finances of the flood insurance program, which is almost 18 billion dollars in debt, mainly due to the payments of insurance against the floods of Hurricane Katrina.

The 406-22, the House vote sent the Flood Insurance Reform Act of 2011 to the Senate of United States. If the Bill is not signed by 30 September, the flood insurance program expires.

U.S. Rep. Judy Biggert, R - ill., who introduced the Bill, said the National flood insurance program "" is too important to leave the forfeiture and too much debt to continue without reform. ""

Among other things, the Bill would be:

? Premiums phase that reflect more accurately the risk of flooding of a property.

? Raise the cap on the annual premium increases 10% to 20%. Some members of the House struggled in vain to maintain the 10 per cent cap.

? Reduce federal subsidies for certain insured properties, including buildings in high-risk flood areas to which insurance claims against repeated flooding.

Limits the maximum coverage of the link ? the rate of inflation.

Floridians hold 40% of the policy

More than 5.6 million policyholders, including millions of owners, participate in the National Flood insurance program. Forty percent of the subscribers of the program are in Florida. The Federal Emergency Management Agency runs the program.

Act federal flood insurance is mandatory if you have a mortgage supported by the Federal Government for a house or other structure in an area designated by the Federal Government in high-risk flood. Standard home insurance policies and other types of property do not include coverage of the floods.

The private flood insurance market is practically non-existent. The reform bill would open the way for private insurers more to sell flood insurance policies. "The result will be increased consumer choice and competition, and it will prevent the Federal Government to the exponential expansion of its role in the insurance, disaster," says U.S. Rep. Spencer Bachus, R - Alabama, Chairman of the House Financial Services Committee.

The House killed an amendment to the Bill by representative of the U.S. Candice Miller, R-Mich., which would have eliminated the National flood insurance program.

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