Flooding the market

The National Flood Insurance Program (NFIP) is expected to be renewed for an additional five year period on Thursday with the support of the White House and the Senate.  In addition to the reauthorization, the bill (s.1940) mandates various pricing, eligibility and financial reforms to reduce the program’s debt. The House has already passed a similar measure.

The government-run National Flood Insurance Program has borrowed nearly $18 billion from the Treasury Department to pay claims resulting from the hurricane season in 2005—a particularly bad year for flood losses. The Congressional Budget Office estimates the bill would save $4.7 billion by 2021.

However, according to an article in the Wall Street Journal (WSJ Article) the bill would more than double premiums over a four year period.

The insurance program is set to expire at the end of July if Congress does not act.

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