Congress needs to act quickly to reauthorize and strengthen the National Flood Insurance Program for the long term to prevent undermining the fragile real estate market, the National Association of Realtors® testified to the Senate Committee on Banking, Housing and Urban Affairs yesterday.

The NFIP authority is set to expire on Sept. 30 for the ninth time in two years; Congress has approved eight short-term extensions during this time.

“We are pleased that last night the Senate passed S. 3814 to extend the NFIP for one year until Sept. 30, 2011. We urge the House to immediately do the same,” said Realtor® Nick D’Ambrosia, who testified on NAR’s behalf.

“However, this month-to-month approach has hindered recovering real estate markets and exacerbated the uncertainty for the more than 5.5 million taxpayers who depend on the NFIP to protect them against floods,” said D’Ambrosia, vice president of training and recruiting for Long and Foster Companies and vice chair of the Maryland Real Estate Commission.

The House has already passed H.R. 5114, the Flood Insurance Reform Priorities Act, which would reauthorize the NFIP for a full five years. The Senate is holding this hearing to begin the process of developing the Senate response to the House reform bill.

As part of long-term reauthorization reforms, NAR supports strengthening the NFIP’s solvency through outreach and education programs that would help raise participation beyond the current 50% of homeowners in federally designated flood areas. The increase in participants would boost funding for the NFIP, help property owners recover from flood losses and decrease future federal assistance when uninsured properties flood and suffer loss, NAR said.

Adding types of coverage for living expenses, business interruption and replacement cost of contents and updating coverage limits — which haven’t been adjusted since 1994 — would also help increase participation.

NAR also strongly supports extending and fully funding the pilot program to mitigate properties that have repeatedly suffered insured flood losses.

“NAR urges the Senate to consider H.R. 5114 and work to strike a proper balance between the NFIP’s fiscal stability and housing affordability,” D’Ambrosia said.

Source: NAR