Editor’s Note: This Commentary (originally posted in April) is timely again because of the damage inflicted by Hurricane Harvey. That damage is sure to complicate Congressional efforts to reauthorize the National Flood Insurance Program (NFIP), which will lapse on Oct. 1 in the absence of Congressional action. The NFIP is administered by the Federal Emergency Management Agency (FEMA) and provides coverage for more than 4.9 million policyholders, including 593,113 in Texas. The Texas total includes nearly 250,000 federal insurance policies in Houston and surrounding Harris County with a total coverage value of about $69.3 billion, according to FEMA data as reported by rollcall.com. FEMA is authorized to borrow only $5.8 billion to cover claims that exceed the funds it has on hand, unless Congress raises the borrowing limit. Much of the NFIP’s $24.6 billion debt came from damage claims submitted after Hurricanes Katrina and Rita in 2005 and Superstorm Sandy in 2012: dg
By Ken Fulgione, for the Chippewa Valley Post
Twenty-four billion dollars. Yes, billion with a “b.”
That is the debt currently held by the National Flood Insurance Plan (NFIP) after years of devastating storms. And with more floods occurring every year that number will only grow.
That’s why it’s critical that Congress act now to reform the NFIP to help families make decisions that keep them from harm’s way.
Having worked in real estate for many years, I would like to encourage Congress to support legislation that provides potential home buyers and renters with important information about a property’s risk and history. While I am proud to help families discover and move into their new homes, the lack of real knowledge about flood risk is gravely concerning to me, especially since purchasing a home is often the biggest expense in someone’s lifetime, and flood damages can be long-lasting and expensive.
Flooding can be a major risk to homes and we are seeing an increase in flooding in communities across our country. Therefore, it is only ethical to ensure that homebuyers have the knowledge and power to make a fully informed decision to purchase or enter into a lease.
In Wisconsin we have laws that inform homebuyers of past flood damage, placement of a home in the flood plain, and flood insurance expectations. However in many states this is not the case. This kind of disclosure should be a national standard.
Legislation that is specifically designed to inform home buyers and renters of these potential liabilities is key to protecting consumers in our community and across the country. With knowledge of a property’s flood risk profile – including its proximity to dams, location within flood hazard zones and past flooding events on the property – home buyers can be more readily armed and prepared for future flood risks, which saves time, money, energy and frustration down the road.
Disclosures like these are in line with current laws already on the books regarding lead-based paint in houses. There, a notice must be provided 10 days prior to financial commitment.
These disclosures would also be in line with some states that have taken a lead on this issue by requiring flood risk disclosure for all home purchases. We are a nation built on learning from others, so why should we not learn from those successes and build on them?
Passage of federal legislation with these considerations will better allow home buyers and renters to make better decisions to reduce their flood risk. When the NFIP is reauthorized later this year, our leaders in Congress should work together to enact common sense solutions to help people in flood-prone areas and to fix the NFIP.
It is time to act, before the next disaster.
Ken Fulgione has been in real estate 15 years, and before that was a small business owner helping people install clean energy projects for their homes. He has lived in Eau Claire almost 50 years, and is a proud supporter and coordinator for the Tuesday Night Blues.
To see a current Washington Post editorial that urges major changes in the NFIP, click here.