House Financial Services Committee Passes Flood Legislation

On Wednesday, the House Financial Services Committee, chaired by
Rep. Michael G. Oxley, R-Ohio, favorably passed H.R. 253, the “Two Floods and You Are Out of the Taxpayers’ Pocket Act.”

Sponsored by Rep. Doug Bereuter, R-Neb., the legislation would reportedly impose actuarial risk-based rates for flood insurance on property owners who have had two or more National Flood Insurance Program (NFIP) claims paid out by FEMA and who have refused buyouts, elevation or other flood mitigation measures funded by FEMA. It would also make repetitive loss policyholders who have refused flood mitigation measures ineligible for Federal disaster relief
assistance.

“NAMIC supports efforts to reauthorize and reform the national flood program,” said Monte Ward, NAMIC’s federal affairs vice president. “These reforms would help FEMA reduce the amount of money spent on frequently flooded properties,” said Ward.

Congress created the NFIP in 1968 to address the increasing costs of taxpayer funded disaster relief for flood victims and the increasing amount of damage caused by floods. Prior to this time, many homeowners were unable to insure against flood losses because private insurers did not offer such coverage. However, in recent years, there has been more awareness of the problem of providing continuing assistance to repetitive loss properties.

“NAMIC believes that it is reasonable to require homeowners who live in flood-prone areas to take advantage of mitigation measures offered by FEMA as a condition of receiving future disaster relief,” continued Ward.

“Most importantly, we are very pleased that Congress is moving forward in reauthorizing the NFIP which is set to expire at the end of this year,” said Ward.

Last April, the House Financial Services Subcommittee on Housing and Community Opportunity held a hearing to examine proposals to deal with the problem of repetitive loss properties.