Flood Bill Targets Repeat Claims:

Legislation heading for the President’s signature would begin to crack down on property owners who make repeated flood damage claims that sometimes far outstrip the value of the property. The new procedure, targeting a fraction of the 4.5 million policyholders in the National Flood Insurance Program, would force repeat claimants to accept flood mitigation efforts, move, or face significantly higher premiums. The House and Senate voted to extend the life of the national program until September 2008. The Federal Emergency Management Agency estimates that the insurance program pays out about $200 million annually, nearly 30 percent of total claims, to property owners who hold only 1 percent of policies. These repetitive loss properties are defined as those with two or more claims of more than $1,000 over the deductible within a 10-year period. The new loss mitigation pilot program applies to an even smaller group, some 6,200 properties nationwide for which four or more separate claims have been made. Under the new program, landowners would be offered assistance in elevation, relocation, floodproofing or demolition and rebuilding. Owners who refuse the offer would see their premiums increase by 50 percent the first time, and an additional 50 percent for every future claim exceeding $1,500 until reaching the actuarial rate for the property. FEMA said the current national average for premiums under NFIP was about $420 a year.