[StBernard] Committee Passes Reforms To National Flood Insurance Program

[Westley Annis]

April 27, 2010                                                  

 

Committee Passes Reforms To National Flood Insurance Program

 

Washington, DC - 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.

 

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