House Committee Approves 5-Year Flood Insurance Extension with Bipartisan Reforms

By | June 13, 2019

A key House committee has passed legislation to renew the National Flood Insurance Program for five years and institute various reforms.

The House Financial Services Committee, by a bipartisan vote of 59 to 0, approved the comprehensive measure (H.R.3167) that includes a number of reforms from Republican and Democratic lawmakers to increase affordability, improve mapping, enhance mitigation and modernize the NFIP.

The bill reauthorizes the NFIP until Sept. 30, 2024 and allows for a retroactive effective date in the event of a lapse.

This bill was advanced by Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, and Ranking Member Patrick McHenry (R-N.C.).

“Flooding is a humbling and equalizing force,” said Waters. “In the wake of the many catastrophic natural disasters we experienced just in the last three years, we’ve seen the best of America during the worst of times, with everyone putting aside their differences, to come together to help one another in a time of need. Now it’s time for Congress to do the same thing.”

The bill will now go to the full House of Representatives for consideration.

2019 Private Flood Insurance Report

There has for years been bipartisan support in the House for a long-term extension and major reforms of the NFIP. But various bills championed by Rep. Jeb Hensarling, R-Texas, who chaired the Financial Services committee before Waters, were passed by the House only to stall in the Republican-controlled Senate. Now lawmakers are trying again.

In addition to the five-year reauthorization of the NFIP, the bill includes a “continuous coverage” provision that allows borrowers leaving the program to purchase private flood insurance to return to the NFIP without penalty. It also authorizes the government to offer umbrella policies for commercial properties, including multifamily and agricultural properties and requires the Federal Emergency Management Agency to make NFIP coverage available to co-op and condo owners.

It also creates a revolving loan fund for states to encourage them in their mitigation efforts. States can use the funding for a number of eligible activities such as elevation or relocation of homes but cannot use the funds for new construction or to assist high-income homeowners.

Other provisions would:

  • Expand flood mapping to all areas of the country while requiring FEMA to utilize updated mapping technology and adequately identify future flood risk.
  • Provide $500 million for each year over five years for flood mapping.
  • Allow for appeals if an aspect of the map is inaccurate, or factors exist that mitigate the risk of flooding.
  • Grant local variances for flood proofing certain agricultural structures.
  • Require an annual independent actuarial study of the NFIP to analyze its financial status of the NFIP.
  • Repeal surcharges currently assessed on policyholders, which in FY 2018, would have saved policyholders $380 million
  • Raise the minimum loan amount that triggers the mandatory purchase requirement from $5,000 to $25,000.
  • Authorize monthly payments instead of the current annual payment for flood insurance premiums.
  • Double to $60,000 the amount of Increased Cost of Compliance (ICC) coverage available to policyholders.
  • Require better accounting of flood risks in urban areas along with a new classification for properties protected by levees.

The NFIP, as a result of federal disaster legislation signed last week by President Trump, is currently slated to expire Sept. 30, 2019.

Resource: 2019 Private Flood Insurance Report

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