The history of the NFIP and the disaster relief program are closely intertwined although neither program has ever been housed bureacratically in the same sub-agency organization. The objective of the NFIP is to reduce disaster outlays since 80% of all natural disaster outlays have historically been flood and hurricane related. The NFIP was started in part because damage from flood was an excluded peril from homeowners insurance coverage one it expanded beyond the peril of "fire" in the modern broad form policies. The original NFIP issued policy largely substituted the peril of "flood" wherever the 1041 NY Fire Policy read "Fire" as the covered peril. The result was an original concern of the property/casualty insurance underwriters that federal or state courts would expand the coverages under the fire policies and homeowners policies as they digested the new "flood" peril. This has not happened and will not.
AND ALWAYS REMEMBER THE NFIP IS A LANDUSE NOT AN INSURANCE PROGRAM!
The NFIP is up for an extension of its expiration date of September 30th of this year. I am flatly predicting a 5 year clean extension but the HOUSE has passed a version that expands coverage of te program, denigrates from the programs purposes, makes it more likely that the NFIP will not come close to solvency and in fact will become a futher drain on the federal fisc. The NFIP is in the whole about $18B largely due to Hurricane Katrina and due to expensive subsidies to the property/casualty industry that performs WYO services.
EVEN AT 42 YEARS THE NFIP IS AN EXPERIMENTAL PROGRAM AND THE PERIOD OF RECORD IS FAR TOO SHORT TO MAKE PREDICTIONS ON ITS PERFORMANCE AS OF TODAY!
What we do know is that "free" disaster relief as currently administered undercuts the purposes of the NFIP. The result is to create "free" NFIP insurance that will shift the forms of disaster relief but not solve the problems of increased outlays of disaster funds.
W. Craig Fugate seems to understand that while they related the NFIP and the disaster programs involve policy tradeoffs to avoid one adversely impacting on the outlays of the other---adversely impacting meaning increasing outlays of the other program when both theoretically are designed to work cooperatively.
FEW IN FEMA UNDERSTAND BOTH DISASTER RELIEF AND THE NFIP! After yesterdays performance in the Senate it is clear that Administrator Fugate does understand this which is a real accomplishment and almost the first to do sol.
The Senate acted serious about finding out more about the NFIP and Adminstator Fugate dodged many questions by offering his answers in writing in the future. Who knows if this will happen.
AT any rate it was good to see a largely substantive NFIP hearing even though the mapping program should be subject to oversight by the House and Senate Science Committees since the statutory mapping standard is to have the maps "Scientifically and technically correct"!
It was clear that neither Administrator Fugate, the Senators, or their staffs understood exactly what this standard means. And FEMA has frequently undermined this standard through its policy decisions and ignorance, even on its mapping staff.
NOAA should be charged by the PRESIDENT and assisted by NAS in examining comprehensively the NFIP mapping decision process to determine whether the standard is being met.
AND AFTER ALL AT THIS POINT THE MAPS OF THE NFIP ALSO ARE THE ENFORCEMENT ARM OF THE NFIP!