Irene’s Legacy

In some towns, Hurricane Irene turned out to be less destructive than initially feared, although that is small consolation to those along the Eastern Seaboard who did feel her force, lost loved ones or suffered property damage or business losses.

With Irene recovery efforts underway, some say there is no better time for Congress to get serious about reforming and renewing the National Flood Insurance Program, which many of the people affected by Irene will call upon.

But there have been plenty of better times for Congress to act, plenty of times for Congress to be reminded of the importance of the flood program. There have been serious floods across the country all year. Just ask people in Iowa, Nebraska, Montana, Kentucky, Connecticut, New York, Utah, Louisiana, Georgia, Wisconsin, North Carolina, Missouri, Mississippi, Tennessee, North Dakota — the list of states with floods this year alone goes on.

Why should Hurricane Irene be any more of a motivator?

Because Irene came rushing in just as time is running out. The NFIP will expire at the end of September if Congress doesn’t act.

The heavy work has been done. Earlier this year, the House passed legislation extending the program for five years and implementing significant reforms. Now all that needs to happen is for the Senate to do its job.

Insurers are motivated to push the Senate to act. During a lapse in the program, NFIP insurers are required to continue paying claims with the expectation of reimbursement once the program is reauthorized, notes Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies.

While this would protect existing policyholders, no new coverage can be written during a national flood program hiatus. A lapse in the NFIP can make buying or selling a home far more difficult when lenders require coverage.

“If Congress fails to act before Sept. 30, thousands of home sales could be delayed or cancelled altogether,” Grande said. “This could cause significant damage to an already fragile economic recovery.”

Budget-conscious lawmakers should know that under the House bill, premiums will begin to match risk so the federal government will not be on the hook like it has been in the past for underpriced policies — provided lawmakers themselves do not intervene to do constituents favors.

If the Senate needs any more motivation, there is always the potential that another major hurricane or flooding event could hit any day.

The final reason the Senate should reauthorize the NFIP is because it’s the right thing to do. Oh, forget that. It’s not right or left — it’s just common sense.