Committee Passes Reforms To National Flood Insurance Program
The House Financial Services Committee today passed legislation introduced by Congresswoman Maxine Waters (D-CA) to improve the National Flood Insurance Program (NFIP), the primary source of reliable, affordable flood insurance coverage for millions of American homes and businesses. The legislative reform package reauthorizes the program for 5 years.
“Without being reauthorized, the flood insurance program has been relying on a series of short-term extensions but recently it expired, leaving homeowners and prospective homebuyers in affected areas unable to buy insurance,” said Congresswoman Waters, Chairwoman of the Housing and Community Opportunity Subcommittee.
More than five million homes and businesses rely on NFIP, which in the past primarily covered properties in special flood hazard areas for which buying flood insurance was mandatory. Now, however, the NFIP has a high rate of voluntary participation. In addition, the U.S. has in recent years experienced increased flooding in areas not designated as special flood hazard areas so FEMA has been revising and updating flood insurance maps to better reflect the risk of flooding in additional areas.
However, thousands of homeowners nationwide now find themselves in flood zones and required to purchase insurance. The legislation delays the implementation of new rate maps so homeowners in a neighborhood newly classified as a flood zone will not be immediately burdened with insurance costs.
H.R. 5114 also provides other resources for homeowners and communities, phases in actuarial rates and increases NFIP coverage limits.
“The maximum coverage limits for flood insurance policies needed to be increased because of inflation and higher housing costs. However, the focus on NFIP should be on providing coverage for those vulnerable to natural disasters, not to subsidize the wealthiest Americans, so we are phasing out premium subsidies for second homes and vacation homes, which will save the program a lot of money,” explained Congresswoman Waters.
Organizations including the National Association of Realtors, the National Association of Homebuilders, the American Insurance Association, the Property Casualty Insurers Association, and the Independent Insurance Agents and Brokers of America support the legislation.