Builders support flood insurance program

The National Association of Home Builders expressed support for a five-year extension of the National Flood Insurance Program in hopes that it will help stabilize the housing market.

The current program is set to expire on September 30, 2011, and the NAHB suggests some reforms that allow for the Federal Emergency Management Agency and the NFIP to adapt to the current economic climate. The NAHB suggested providing policyholders with more options to choose from and raising the minimum deductible for paid claims, which would drive home owners to better protect their homes. The trade association also recommended creating a Technical Mapping Advisory Council to ensure the Flood Insurance Rate Maps being used are valid.

Barry Rutenberg, vice chairman of NAHB, testified before the Senate Banking Committee saying that extending the program could help stabilize the housing market and avoid problems experienced in the past.

"Unfortunately, during this latest interruption, many home buyers faced delayed or cancelled closings due to the inability to obtain NFIP insurance for a mortgage," Rutenberg said. "In other instances, builders themselves were forced to halt or postpone construction on a new home due to the lack of flood insurance approval, adding unneeded delay and job loss."

According to the FEMA website, more than 5.5 million flood coverage policies were reported in force in February 2011, with 502 losses claimed that month. The program was created to provide flood insurance to homeowners, renters and business owners in participating communities who agreed to enforce ordinances that either meet or exceed the FEMA requirements to reduce flood risks.  

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