Congress Finally Extends Flood Insurance Bill

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After several false starts, Congress passed a permanent extension of a federal flood insurance bill last week. The bill extends the federally subsidized National Flood Insurance Program for five years and comes after the expiration of several temporary stop-gap measures.

The measure not only provides coverage for an estimated 4.5-million homeowners whose property lies in a flood plain, but also cracks down on repeat claimants by requiring them to accept mitigation efforts, move or face significantly higher premiums. Under the mitigation initiative, projected to cost $40 million, homeowners who make repeat claims would be offered assistance to elevate, relocate, flood-proof, demolish or rebuild their homes. Homeowners who refuse would have their premiums increased by 50% the first time, and an additional 50% for every future claim exceeding $1,500.

The federally subsidized program, which insures about 90% of all properties located on a flood plain, was scheduled to expire on June 30. The program, administered by the Federal Emergency Management Agency (FEMA), was created by the federal government in 1968 to help people in areas vulnerable to floods obtain reasonably priced flood insurance because private sector insurers consider those properties as too risky to insure.

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