Flood Insurance Reform Bill Garners Bipartisan Support
April 7, 2011
Legislation that would extend the National Flood Insurance Program (NFIP) for five years garnered bipartisan support and passed by a voice vote April 6 in the Financial Services Subcommittee on Insurance, Housing and Community Opportunity.
HR 1309, introduced by Rep. Judy Biggert (R-IL), chair of the subcommittee, would extend the NFIP through Sept. 30, 2016, phase out the program’s rate subsidies, gradually raise all premiums to reflect actual costs, improve the accuracy of flood maps and allow more public input into the mapping process, and encourage private insurer and reinsurer participation in the market.
The bill also adds two new coverage options, ties policy limits to inflation, and sets higher deductibles for rate-subsidized properties.
“I’m very pleased we were able to move this bill forward with bipartisan support. The current program is in deep financial trouble and our bill places it back on sound footing by phasing in actuarially sound rates, and it addresses a broad range of concerns about new maps, as well as dams and levees,” Biggert said. “Together, these reforms will help ensure reliable protection for homeowners and businesses while shifting the burden of risk off American taxpayers.”
The measure is co-sponsored by subcommittee members Maxine Waters (D-CA), Scott Garrett (R-NJ), Robert Dold (R-IL), Shelley Moore Capito (R–WV) and Steve Stivers (R-OH).
ALTA sent a letter April 4 to Biggert supporting the legislation.
“ALTA believes that a long-term, sustainable fix for the National Flood Insurance Program is necessary to protect taxpayers and ensure that buyers and sellers do not face the uncertainty and delays that accompany a lapse in the National Flood Insurance Program,” wrote Kurt Pfotenhauer, ALTA’s chief executive officer. “Last year’s disruptions cost consumers and businesses valuable time, money and unnecessary hinder our already fragile housing recovery.”
Five and a half million taxpayers depend on the NFIP as their main source of protection against flooding. The program has been extended five times, with several lapses, since the original reauthorization of the current program ended Sept. 30, 2008. More than 1,350 closings per day were affected by the lapses in the NFIP last year, according to the FEMA and the National Association of Realtors (NAR). Without flood insurance, no federally-related mortgage loans may be made in nearly 20,000 communities nationwide.
ALTA was successful in pushing for an extension of the flood program last year and urged Congress to take proactive steps to enact a long-term extension.