DS News

73 "There may be some changes to investor guidelines as to what we do. If there are natural disasters on top of this COVID pandemic, and if this pandemic leads to significant job losses and so on, it'll make it even more challenging." —Gagan Sharma, President and CEO, BSI Financial THE NFIP TWO-STEP Another complicating factor in the midst of this crisis are the ongoing issues tied to the National Flood Insurance Program (NFIP). In response to the COVID-19 pandemic, FEMA is extending the grace period for NFIP renewals. For customers who may be experiencing financial hardships, the agency is extending the grace period to from 30 to 120 days. is extension applies to NFIP flood insurance policies with an expiration date between February 13 and June 15, 2020. To avoid a lapse in coverage, there is typically a 30-day grace period to renew policies. However, due to the widespread economic disruption arising from this pandemic, FEMA recognizes that flood insurance policyholders may not meet the standard policy renewal deadline. e NFIP is currently under a short- term extension, and the next steps will be reforming the program. In a report by Christa Nadler, EVP of Risk Placement Services, Nadler dives into what problems the NFIP has faced in the past, and what the future of the program looks like. According to Nadler, open-market flood coverage is becoming more and more vital, and "data is king." With additional sources of data available, more carriers than the NFIP alone are looking at providing insurance. When it comes to reforming the NFIP, Bob Butler, Director at National Flood Services, notes that Congress has been "kicking the can down the road," continuing to renew the program under current legislation. Butler outlined the direction he believes the program should take when considering reform. "I think they really need to take a hard look at a couple of areas," Butler told DS News. "I think how they rate insurance coverage and determine premiums for the insurance coverage under the program probably requires a good hard look. ey have a certain segment of their policy base that is what they call subsidized structures that were built before there was any flood insurance information available. ey continue to get a subsidy under the program. ey're not charged what we call a 'full actuarial rate.'" "ere's no activity undertaken to mitigate those properties, to either prevent future damage or to even remove them from the flood program altogether," Butler continues. "ey continue to be able to get purchase coverage at these, some of them at the subsidized rates, and they create a drain on the overall national flood insurance fund. I think those are a couple of bigger areas." MOVING FORWARD Following the pandemic, many believe the structure of disaster response will change drastically. For example, Jeff Schlegelmilch, the Deputy Director of the National Center for Disaster Preparedness at Columbia University, predicts a "bridge" between government and industry to accelerate collaboration across different organizations to speed up developments. "Specifically for COVID-19, a lot of the whole-community approach to disaster management that really emerged after Hurricane Katrina and looking at how it can't just be a government solution, it needs to embrace the whole community," Schlegelmilch told DS News. "I think in parallel, that also very much seeped over into pandemic planning and recognizing you need private sector engagement, you need government engagement, and you need community engagement." Jamie Kosofksy, Managing Partner, Brady and Kosofsky Law, told DS News, "e lessons being learned during the COVID disaster are going to stick around for a while." Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T.

• Cover