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September 21, 2016

NFIP 2017 – Better Flood Protection for All of Us

The terrible recent flooding in Louisiana reminds us all of the importance of the National Flood Insurance Program (NFIP), and the need to make sure that the NFIP is properly constructed to support property owners in Louisiana and across the country. Indeed, as the frequency and pervasiveness of severe flooding increases across the USA – from Carolina to Texas to Colorado (in the mountains) – it is clear that getting NFIP right is now a national imperative.

Four years ago, a small group of business and elected leaders from Louisiana came together to defend our residents from ruinous NFIP rate increases. Our effort grew into a national movement, the Coalition for Sustainable Flood Insurance, and – despite historic gridlock and deep opposition – we were ultimately able to pass bipartisan legislation to protect our economy and our communities.

But what felt at the time like total victory was really just getting back to the starting line. While the Homeowners Flood Insurance Affordability Act of 2014 removed the most harmful unintended consequences of the Biggert-Waters reform legislation, such as the loss of grandfathering, it left open many questions on how to improve the efficacy and sustainability of the NFIP.

In 2017, NFIP is up for re-authorization. This is our chance to not only ensure that the program continues, but that it improves, to better serve all Americans. With this goal in mind, the Coalition for Sustainable Flood Insurance is gearing up for 2017 reauthorization of NFIP, with a focus on five areas:

1. Rate Fairness – Ensuring that home and business owners who have played by the rules, built to code, and carried insurance are protected
2. Mapping Accuracy – Improving the accuracy of maps (and credit for mitigation), the technical foundation of good flood insurance
3. Program Reforms – Making the program more efficient, and encouraging participation even from those who do not perceive immediate flood risk
4. Business Protections – For example, the inclusion of a “Loss of Use” provision
5. Private Market Participation – Investigating how the private market can participate more in NFIP, while avoiding “cherry picking”

All of these improvements will be pursued based on the principles of a flood insurance program that is financially responsible and does not create perverse incentives. But it will also recognize that there is no quick solution to the challenge of flooding, and that a combination of future land-use planning and broad risk mitigation will be required to get both our people and our program to safer ground.

Flood insurance was once seen as an issue for southern Louisiana, along with a few other coastal friends. It is now seen as a national challenge. For this reason, we will get flood insurance right in 2017, for all of us.

Michael Hecht
President & CEO
Greater New Orleans, Inc.