By NAR 2013 President Gary Thomas
One of the proudest achievements last year by the National Association of REALTORS® (NAR) was when Congress reauthorized the National Flood Insurance Program (NFIP). This is a very important development, and NAR worked hard to ensure its passage.
The NFIP is critical to home sales, because in order to purchase a home in a floodplain, flood insurance is required for the transaction.The 5-year reauthorization brings stability to the NFIP, which had been subject to two lapses and 17 stop-gap measures, since 2008.
However, because of the high costs associated with the program, the NFIP has come under question in recent years.I’ve heard from many of our members, especially those located in coastal states that changes made to the law as part of the reauthorization could increase insurance costs by up to 20 percent, as “subsidized” policies (property owners who were paying less than the cost of the “actuarial” or full risk cost) are phased out.This would pose a heavy burden for many working-class coastal residents, who could pay more than $20,000 per year for flood insurance.
That’s why I created a Presidential Advisory Group (PAG) to examine the issues surrounding flood insurance and NFIP.The PAG will study the issues and report back to me and the Board of Directors.We also expect a congressional hearing in July on the affordability of the rate provisions.
While we understand that costs need to be controlled, we also know how crucial the NFIP is to millions of Americans.We must make sure the program remains viable and affordable to taxpayers so that it is available for home buyers.
If you’d like to learn more, NAR has a video that helps explain the changes to the NFIP and rate schedules.
We’ll keep you posted on any developments.In the meantime, NAR will continue working with our friends in Congress to protect the NFIP.