Congress can ease the transition to risk-based pricing for flood insurance without delaying the much-needed reforms to put the National Flood Insurance Program on a path to fiscal viability, the National Association of Mutual Insurance Companies said today.
“Delaying the NFIP reforms passed just last year isn’t solving the problem of expensive flood insurance premiums; it’s just switching back to the program that couldn’t sustain itself without taxpayer-funded bailouts,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “We should fix any affordability problems with targeted solutions rather than breaking the NFIP by delaying all of the reforms.”
In testimony submitted to the House Financial Services Housing and Insurance Subcommittee in advance of a hearing today, NAMIC outlined several steps Congress could take to help homeowners more easily afford coverage without risking the NFIP’s future.
Means-tested assistance to property owners for whom risk-based rates would create genuine hardship.
Low interest loans or grants to finance property owners’ investment in mitigation.
Encouraging higher deductible flood policies.
Allowing property owners to establish tax-exempt flood loss accounts to pay out-of-pocket flood costs.
“We can take steps to keep flood insurance rates affordable, but it should be done in a means-tested and transparent way; not everyone who receives flood premium subsidies needs taxpayer assistance,” Grande said. “Flooding is the most common natural disaster, and homeowners should know the true risk they face from flooding. Congress can best help keep flood insurance affordable by encouraging homeowners to take steps to prevent flood damage before it happens.”
NAMIC is the largest property/casualty insurance trade association in the country, with 1,400 members serving more than 135 million auto, home and business policyholders and writing more than $196 billion in annual premiums. More than 200,000 people are employed by NAMIC member companies.
Director, Federal Public Affairs
Posted: Tuesday, November 19, 2013 10:46:18 AM. Modified: Tuesday, November 19, 2013 3:15:41 PM.
317.875.5250 - Indianapolis | 202.628.1558 - Washington, D.C.