Bill permits private flood insurance in place of federal coverageReprints
The U.S. House of Representatives passed legislation that includes a provision to clarify that mortgage lenders could accept private flood insurance in lieu of federal coverage to satisfy the mandatory purchase requirement.
The House approved the bill, which includes a provision that aims to increase acceptance of private flood insurance products by clarifying how nongovernment flood insurance policies can satisfy the federal flood insurance mandate for properties located in high-risk areas, but would also reauthorize the Federal Aviation Administration ahead of a pending Sept. 30 expiration, by a 264-155 vote on Thursday.
The flood language, commonly referred to as Ross-Castor after sponsors Dennis Ross, R-Florida, and Kathy Castor D-Florida, passed the House last year by a vote of 419-0 and was adopted by the House Financial Services Committee in June by a vote of 58-0.
“The recent major flood events across the country have provided a much-needed sense of urgency to our efforts to provide consumers with private sector flood insurance options,” Mr. Ross said in a statement. “Currently, many homeowners in Florida and across the country face unaffordable flood insurance premiums and a lack of coverage options, largely due to federal regulatory barriers that give the National Flood Insurance Program a harmful monopoly over the marketplace. The legislation passed today will greatly benefit consumers in flood prone areas because it will remove these unnecessary barriers and allow more private flood insurers to enter the market, leading to increased competition and more affordable, comprehensive policies.
“It would be irresponsible to delay passage of this bipartisan reform any longer,” he continued. “If our Senate colleagues are serious about improving the flood protections available to homeowners and reducing the suffering caused by major floods, then they must act quickly to pass this legislation.”
The SmarterSafer coalition, composed of taxpayer advocates, environmental groups, insurance interests, housing organizations and mitigation advocates, applauded the passage in a statement on Thursday.
“This technical correction to the federal flood insurance law is an integral part of an ongoing effort to comprehensively reform the broken NFIP, which is $25 billion in debt and struggling to remain viable,” the coalition said. “As we have seen in the recent flooding events, far too many Americans are without this vital coverage and will have trouble rebuilding in the days, weeks and months ahead. But fostering a more robust marketplace for private insurers will help give more Americans access to flood insurance they desperately need while driving down costs across the board. We thank the entire House for passing this critical, bipartisan provision and we urge the Senate to build on this momentum by also passing this bill.”