An NAA/NMHC-supported bill (H.R. 1309) to extend the National Flood Insurance Program (NFIP) for five years unanimously passed the House Financial Services Committee on May 13. The NFIP has been operating on several short-term extensions for the last few years and absent legislation it will expire Sept. 30, 2011.
HR 1309 makes much-needed reforms to the NFIP to address its almost $18 billion debt, mostly by phasing out subsidized rates and phasing in actuarial rates for several property categories including second homes, vacation houses and commercial properties, repetitive-loss properties and those with lapsed policies.
Importantly, apartment properties are not among those proposed to lose the subsidized rate. Other provisions include: increased coverage limits tied to inflation; the addition of business interruption coverage; and provisions to improve the accuracy of rate maps.
Important to apartment owners is a new obligation if the legislation is enacted to provide notice to residents of the availability of contents coverage through the NFIP. FEMA’s Director would develop and distribute the notice, but apartment own ers would have flexibility regarding the delivery method.