Senators call for long-term flood insurance bill

A bipartisan group of 41 senators on Monday called on Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) to pass a long-term flood insurance bill either this month or as soon as possible when the Senate returns from next week's President's Day break.

The National Flood Insurance Program (NFIP) expires at the end of May this year, and since 2008, the program has been extended only for short periods of time. The senators wrote that the program expired four times in 2010, resulting in a lapse of coverage.

"It has been estimated that those program lapses resulted in the delay or cancellation of more than 1,400 home closings per day, further damaging an already fragile housing market," the senators wrote.

The letter, led by Sens. Jon Tester (D-Mont.) and David Vitter (R-La.), also notes that while the House approved a long-term flood insurance program last July, the Senate has yet to move on a bill approved by the Senate Banking Committee.

The Property Casualty Insurers Association of America welcomed the letter and said it shows the Senate is ready to follow the House's lead.

"This strong, bipartisan support in the Senate underscores the sense of urgency for passing a long-term solution for the National Flood Insurance Program," said Ben McKay, senior vice president of federal government relations for PCI. "Millions of American home and business owners rely on flood insurance in every state. This is not just a coastal concern."

The House-passed bill would restructure the NFIP by phasing in actuarially sound flood insurance premiums, which supporters hope would would help erase the nearly $18 billion in debt that the program has racked up over the past several decades. In the final version passed by the House (which was part of the payroll tax extension bill), this change was expected to raise $4.9 billion over 10 years, allowing the program to start paying down this debt.

— This story was updated at 4:22 p.m. to reflect the final scoring of the House-passed flood insurance bill at $4.9 billion, not $4.2 billion.