Penn. Hails House Committee Passage of Private Flood Insurance Bill

March 17, 2016

Pennsylvania Insurance Commissioner Teresa Miller hailed a recent vote by the U.S. House of Representatives Financial Services Committee approving the Flood Insurance Market Parity and Modernization Act (H.R. 2901).

Miller said this legislation encourages more private insurers to write flood insurance. She said the bill also fits with current efforts by Pennsylvania Gov. Tom Wolf’s administration to increase consumer protection by raising awareness about growing options in the private flood insurance market that could result in substantial savings for many Pennsylvania homeowners.

“Protecting consumers and homeowners is the Insurance Department’s top priority. In Pennsylvania, we are working with insurers to make affordable, private flood coverage more available for our consumers,” Miller said.

“We are encouraged by the unanimous, bipartisan passage of this bill out of committee and are urging the full House of Representatives to consider this legislation soon, and the Senate to follow suit,” Miller said. “We need our partners in the federal government to take this important step to make sure mortgages are available to homeowners with private flood insurance.”

In January, Miller testified before the House Subcommittee on Housing and Insurance. During her testimony, Miller stressed that one of the obstacles to increasing the availability of private flood insurance is that many lenders are unsure if private coverage meets the requirements of the federal government. This leads to reluctance among lenders to issue mortgages for homes with private flood coverage.

Miller said the Flood Insurance Market Parity and Modernization Act (H.R. 2901) would remove that obstacle by requiring lenders to accept private flood insurance if it complies with state laws and regulations and includes the required limits of coverage.

Mortgages backed by the federal government require flood insurance for homes in designated flood zones. Prior to the last three years, almost all residential flood insurance was sold through the federal government run National Flood Insurance Program (NFIP).

Miller said recent premium increases for many homeowners with NFIP policies, and re-mapping of many other properties into flood zones by the Federal Emergency Management Agency, has made the flood insurance market more attractive to private insurers.

“Providing options for homeowners when it comes to flood insurance is important to help consumers who need or want this coverage find it at more affordable prices,” Miller said.

Last month, Miller announced creation of a one-stop shop for consumers to find information about private flood insurance in Pennsylvania. The information is available on the Insurance Department homepage,, by clicking on the Flood icon under Top Pages.

Miller said the legislation approved by the House committee would define as acceptable a policy issued by a private insurance company that is licensed, admitted, or otherwise approved in the state in which the insured property is located. A policy issued by a non-admitted insurer, also known as a surplus lines policy, would also qualify.

She said including surplus lines policies is important, as most private coverage now sold in Pennsylvania is through the surplus lines market. At least five surplus lines carriers sold flood insurance to homeowners in Pennsylvania in 2015, and have written nearly 1,000 policies.

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