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July 12, 2011

Johanns Introduces Senate Flood Insurance Legislation

WASHINGTON – U.S. Sen. Mike Johanns (R-Neb.) today introduced legislation that would clarify the way flood insurance eligibility is determined for property owners.

"Many throughout the Missouri River basin have seen their homes, farms and businesses impacted in various ways by flooding and successive dam releases, so it makes no sense to apply an arbitrary deadline for everyone affected," Johanns said. "Nebraskans are facing some very difficult times ahead, and they deserve to be treated fairly. Anyone who bought insurance a month before they experienced flooding and were promised coverage should be eligible for it."

Under current federal law, anyone with flood damage must have purchased flood insurance 30 or more days before the date the Federal Emergency Management Agency (FEMA) declares a "flood in progress" in order to be eligible for insurance payments. FEMA has determined this date to be June 1 all along the Missouri River system, regardless of the fact that flood waters affected Nebraska much later. Further confusing policy holders, FEMA later indicated that those who bought insurance after the cut-off date might or might not have their policies honored. This opened the door to unfair treatment and no ability for a property owner to know whether their policy would be honored.

Johanns' legislation removes the arbitrary deadline and directs FEMA to honor policies purchased 30 days or more before flood waters reached the property. As a result, the 30-day period would remain in effect, appropriately tied to the actual flooding. U.S. Rep. Lee Terry (R-Neb.) introduced identical legislation in the House of Representatives.

This legislation is the latest development in Johanns' effort to bring clarity to FEMA's flood insurance decision-making.

According to FEMA Administrator Craig Fugate, FEMA determined June 1 to be the official starting date of the Missouri River flood because it was the date the U.S. Army Corps of Engineers (USACE) increased the water release rate to record levels at the Garrison Dam in North Dakota.

FEMA has since acknowledged that dam releases occurring after June 1 could be the cause of some property damage, but failed to provide clarity as to which policies would be honored and which would not.

A copy of the Johanns' legislation can be found here.

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