HYDE-SMITH JOINS BOLD BID TO REMAKE NATIONAL FLOOD INSURANCE PROGRAM
Miss. Senator is Lead Cosponsor of Bipartisan Reform Bill to Ensure Affordability and a Better Return on Investment for Troubled FEMA Program
WASHINGTON, D.C. – U.S. Senator Cindy Hyde-Smith (R-Miss.) today said Mississippians would benefit from more affordable premiums and greater certainty under a major bipartisan bill introduced Thursday to remake the troubled National Flood Insurance Program (NFIP).
Hyde-Smith is a lead cosponsor of the National Flood Insurance Program Reauthorization and Reform Act or NFIP-RE Act (S.2187), a comprehensive five-year reauthorization of NFIP with more than 40 reforms to ensure affordable premiums, promote flood mitigation projects like levees, and give the public a greater say in NFIP policies.
“I’ve heard from Mississippians from the Gulf Coast to the Delta and the Tenn-Tom to Rankin County, who are justifiably worried by the prospect of unaffordable flood insurance and continued NFIP uncertainty,” Hyde-Smith said. “It is time for Congress to embrace commonsense reforms that emphasize solvency and affordability for policyholders, while allowing for robust input from local communities.”
Current NFIP authorization expires Sept. 30, 2019, creating an opportunity for Congress to enact a five-year reauthorization with the NFIP-RE Act. In the past two years, the program has operated under 10 short-term extensions.
Hyde-Smith championed proactive mitigation and mapping reforms in the NFIP-RE Act, including a new community mapping appeals process regarding flood maps created by the Federal Emergency Management Agency (FEMA) for states, local governments, or property owners, giving FEMA the incentive to “get it right the first time” and repay policyholders for contributing to the body of flood risk knowledge. It also directs FEMA to factor nonfederal flood control structures, like levees, when determining flood risk zone designations.
“We’re trying to flip the script on mitigation projects, from being reactionary to being proactive. This is the first bill that provides a significant amount of real money for pre-disaster mitigation, which would give taxpayers a better return on investment. It is far more expensive to rebuild after a disaster than it is to do everything you can to protect yourself beforehand,” Hyde-Smith said.
According to FEMA and the Congressional Budget Office, mitigation programs save the American public an estimated $5.2 billion dollars annually. There is a $6 future savings gain for every dollar spent on mitigation—and a 54:1 or higher return on community-wide projects.
Hyde-Smith also said the bill would increase NFIP participation among homeowners and small businesses by capping the premium rate increases to 9 percent. Under the current system, rates can rise up to 25 percent annually in perpetuity.
“Runaway premium hikes under the current system undermine and weaken the flood insurance program, which increases the burden on taxpayers to pay for federal disaster assistance to cover uninsured losses,” Hyde-Smith said. “There’s no point in having flood insurance if nobody can afford it. This bill would help meet the equally important goals of solvency and affordability.”
The bill also includes reforms to tackle agency mismanagement, unsustainable debt service costs and contractor profiteering.
Hyde-Smith has worked with Senators Bill Cassidy (R-La.), Bob Menendez (R-N.J.) and others to develop the NFIP-RE Act. Principles in the NFIP-RE Act were outlined in a joint letter to the Senate Banking Committee, which Hyde-Smith signed to demand action on NFIP reauthorization and reform.
A summary of the NIFP-RE Act is available here.