Latest NFIP extension doesn't fix issues in the flood insurance market

After the US House of Representatives passed what some experts called a head-scratching short-term measure to extend the National Flood Insurance Program (NFIP) through December 20, 2019, the President then signed legislation passed by Congress to extend the program through to September 30, 2020. However, that doesn’t mean the issues plaguing the NFIP are solved ­­– far from it, in fact. If the Biggert-Waters Flood Insurance Reform Act of 2012 had been successfully implemented, NFIP’s flood insurance rates would be higher than they are today and would better reflect the actual flood risk facing property owners, whether the government implements short-term or long-term extensions to the NFIP, according to one expert. “Rates would be at least 30% higher approximately than they are right now,” said Craig Poulton (pictured above), CEO of private flood insurer Poulton Associates. “If that were the case, the temporary reauthorizations would actually be healthy for the marketplace because the private market would be enabled to more effectively cherry-pick the NFIP’s book of business.”