The National Flood Insurance Program has been effective at reducing costs to property owners and saving taxpayers money, but since 2005 floods and damages have pointed toward a need to reform the program, said the National Association of REALTORS® in testimony yesterday before the House Subcommittee on Housing and Community Opportunity.

As the leading advocate for private property rights, NAR calls upon Congress to make the NFIP stronger and more efficient so that it can better protect the nation's property owners, said NAR First Vice President Maurice Moe Veissi.

Veissi, a REALTOR® for more than 40 years and broker-owner of Veissi & Associates Inc. and TM Realty, located respectively in Miami and Daytona, Fla., said that Congress initially should reform how it renews the program by adopting minimum five-year NFIP reauthorizations.

Extending the NFIP month-to-month through stop-gap measures - some might say 'punting' from one deadline to another - is an inefficient way to operate a major federal program. And it creates financial and real estate market uncertainty for millions of taxpayers, financial market lenders, and insurers who can't, or won't, operate under these uncertainties, said Veissi. Such an extension provides much-needed certainty to a recovering real estate market and to millions of taxpayers who depend on this important program, he said.

NAR also called for reforms that would strengthen the program's financial footing. Increasing community participation would lead to increased funds for the NFIP, help property owners recover from flood losses, and decrease future federal assistance when uninsured and under-insured properties flood and owners experience losses, he said.

Properties facing identical risk should have an identical rate, Veissi said. The rate should not be based directly or indirectly on the type of occupancy or the income or assets of the owner. That would mean two properties could be located next to each other, but the commercial property could get a bill that's four times more, and that's not right.

Discounted insurance rates should be eliminated for older properties with a history of repeated payouts where an owner has refused to mitigate against future insured losses.

NAR also supports H.R. 1264, the Multiple Peril Insurance Act by Rep. Gene Taylor, D-Miss., that would expand NFIP to include wind coverage. That would further reduce post-disaster assistance for which taxpayers pay while paying for itself, according to the Congressional Budget Office. Covering both wind and flood would also eliminate the pushback we've seen from insurers about whether damage was caused by wind or flood, said Veissi.

He told the congressional panel that NAR stands ready to work with members of the committee to develop meaningful reforms to the NFIP that will help protect this country's property owners and renters prepare for and recover from future losses resulting from floods.