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Aaron Skalos, Cherry City Assistant Fire Chief, stands on mud-covered North Avenue in Millvale after a flash flood on July 5.
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Congress authorizes four-month extension of National Flood Insurance Program

Andrew Rush/Post-Gazette

Congress authorizes four-month extension of National Flood Insurance Program

WASHINGTON — With just hours to spare, the U.S. Senate on Tuesday reauthorized an insurance program that helps owners rebuild water-damaged properties in flood zones.

In an 86-12 vote, senators extended the program through Nov. 30. President Donald Trump immediately signed the reauthorization. Without action it would have expired at midnight. 

Pennsylvania’s senators were divided with Democrat Bob Casey voting to reauthorize the National Flood Insurance Program and Republican Pat Toomey joining 11 other Republicans who voted against it

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“The NFIP is broken and bankrupt. Since 2005, the program has lost approximately $40 billion in taxpayer money. Roughly one-quarter of all claims go to just one percent of policy holders who own repeatedly flooded properties. Congress should have passed a bill, with at least modest reforms, that put the NFIP back on a path to fiscal solvency,” Mr. Toomey said after the vote.

Ron Ruman, spokesman for the Pennsylvania Department of Insurance, said the reauthorization is good news, although his agency would have preferred to see a longer term solution that would better stabilize the market.

Allegheny County leaders are pleased with the reauthorization, particularly after a rainy June and July that swamped area roads and properties.

“We know from recent events in the county that residents are just now thinking about flood insurance when it hasn’t been a priority before,” County Executive Rich Fitzgerald said. “Thanks to the National Flood Insurance Program, more people in our communities will be covered.”

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Emergency Services Chief Matt Brown said the flooding is risk assessors’ top concern in the region.

In the decade beginning in 2006 Pennsylvanians filed 16,902 NPIF claims totaling $553 million. That includes nearly $10 million worth of claims filed for properties in Allegheny County.

Established in 1968, the NFIP offers coverage at below private-market rates for properties with significant flood risks in communities that adopt floodplain management standards meant to guide development away from flood-prone areas and to mitigate damage. The Federal Emergency Management Agency estimates that those standards save the nation $1.87 billion in flood losses annually.

All properties in flood zones that have federally backed mortgages are required to have NFIP coverage. Rates are set based on flood risk of each property based on elevation, occupancy type and location within risk zones.

Some lawmakers have expressed concerns over the program’s debt, its premium increases and its falling enrollment from 5.5 million in 2010 to 5 million last year.

The program owes $20.5 billion debt to the national treasury out of a $30.4 billion cap, according to the Congressional Research Service. The debt is paid down through premium revenues, which average $3.6 billion per year. In 2017, Congress forgave $16 billion in debt so that the program could pay claims from Hurricanes Harvey, Irma, and Maria.

In 2012 Congress attempted to make the program solvent through the Biggert-Waters Flood Insurance Reform Act, which abruptly ended subsidies for businesses, second homes, and properties that repeatedly flooded. When insurance rates skyrocketed, Congress delayed implementation so subsidies could be gradually phased out.

Private insurers — who historically excluded flood insurance coverage from their policies — responded by getting back into the market and some are now providing rates below the NFIP’s.

That’s why the Pennsylvania Department of Insurance is encouraging property owners to shop around. One homeowner in Williamsport who was paying $7,500 a year through NFIP now pays just $1,475 through a private insurer, and another in Dauphin County who was paying $2,700 a year found a private insurance policy for $700, according to the agency.

Washington Bureau Chief Tracie Mauriello: tmauriello@post-gazette.com; 703-996-9292 or on Twitter @pgPoliTweets.

First Published: July 31, 2018, 7:59 p.m.

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Aaron Skalos, Cherry City Assistant Fire Chief, stands on mud-covered North Avenue in Millvale after a flash flood on July 5.  (Andrew Rush/Post-Gazette)
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