WASHINGTON, DC – In an effort to protect Rhode Island homeowners and businesses, U.S. Senator Jack Reed (D-RI) is calling for a long-term reauthorization and reform of the National Flood Insurance Program (NFIP), the federally-backed coverage mandated for some 5.6 million properties owners nationwide.  The NFIP provides coverage protection against property losses that result from flooding in communities that agree to manage their floodplains to reduce potential damage.

All 39 cities and towns across Rhode Island are among the 20,000 flood-prone communities across the country that depend on flood insurance.  Senator Reed believes a long-term extension of the NFIP is essential for more than 16,000 Rhode Island homeowners and businesses -- and the real estate market and economy in general -- and is pressing Congress to pass a bipartisan, five-year extension of the program before it expires at the end of July.

“Letting flood insurance lapse would threaten the housing market and put communities in peril.  Instead of just keeping the program afloat we need a long-term solution,” said Reed, who helped unanimously pass bipartisan flood insurance legislation through the Senate Banking Committee earlier this year.  “Congress must responsibly reform and reauthorize the National Flood Insurance Program to protect families and businesses from the next flood.”

Reed supports passage of legislation that would modernize maps used to designate flood zones as well as determine rates and set premiums more in line with actual risks.  Senator Reed has authored legislation to improve the maps the federal government uses to predict the risk of flooding.

The NFIP was started in 1969 to fill a void that private insurers were reluctant to fill.   It helps address the increasing costs of taxpayer-funded disaster relief for flood victims and the increasing amount of damage caused by floods.  The program was largely self-financing until 2005 when it was overwhelmed by claims from hurricanes Katrina and Rita and now owes nearly $18 billion to the U.S. Treasury.

The National Flood Insurance Program allows property owners in participating communities to buy insurance against flood losses from the federal government.  More than 5.6 million property owners nationwide rely on the program, including 16,238 in Rhode Island. 

The federal program currently covers about $3.9 billion in property in Rhode Island.  Since the program’s inception, it has paid out about $81.3 million to Rhode Islanders to cover over 3,700 claims.

According to the Rhode Island Emergency Management Agency (RIEMA), there are nearly 500,000 homes and businesses in Rhode Island, and only 3% currently have flood insurance.   RIEMA urges anyone with a home or business located close to a body of water to purchase flood insurance.  Standard home and business-owners’ insurance policies do not cover flood-related damages.  A separate flood insurance policy may be purchased through a local insurance agent.

For more information on the National Flood Insurance Program, visit the Federal Emergency Management Agency’s (FEMA) NFIP web page or visit RIEMA’s Rhode Island Floodplain Management we page.