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Insurance Journal

A Mix of Flood Insurance Reforms

The federal flood insurance program has a knack for inspiring ideas from reformers across the political spectrum on how to improve government.

If some of today’s reformers get their way, flood insurance will become a mandatory topic at real estate closings and a tool for protecting flood-prone lands from development. There will be a means-test for premium subsidies and an end to support for repeat flood properties.

Also, rates charged by the National Flood Insurance Program (NFIP) will more accurately reflect the unique flood risk of individual homes under changes being developed by the Federal Emergency Management Agency (FEMA).

There has for years been bipartisan support in the House of Representatives for a long-term extension and major reforms of the NFIP. But various bills championed by Rep. Jeb Hensarling, R-Texas, former chair of the House Committee on Financial Services, and passed by the House, have stalled in the Republican-controlled Senate.

Now under leadership of Rep. Maxine Waters (D-Calif), who replaced Hensarling as head of the committee after Democrats gained control of the House, lawmakers are trying again.

Bills now before the committee would, among other things, renew the NFIP until Sept. 30, 2024. The program is currently set to expire at the end of May under one of the 10 short-term extensions Congress has approved since 2017.

The current House proposals would also forgive the NFIP’s remaining $20 billion debt and boost funding for mapping, floodplain management, and mitigation for homes, businesses and infrastructure.

“Everyone is at risk of flooding,” said Waters, stressing that it is “not just a coastal issue.”

According to FEMA, floods are the nation’s most common and costly natural disaster, affecting all 50 states.

During a Capitol Hill hearing last month, advocates spoke on the bills and added a few of their own ideas — and criticisms — to the mix for lawmakers to consider.

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