The House of Representatives voted 264-155 today to pass bipartisan legislation that encourages the sale of private flood insurance in place of policies from the federal government in high risk areas where flood insurance is required.
The bill would give private insurers and state regulators more flexibility in what private policies satisfy the requirement that properties in flood zones have insurance.
The Flood Insurance Market Parity and Modernization Act (HR 1422), sponsored by Reps. Dennis Ross (R-Fla.) and Kathy Castor (D-Fla.), seeks to correct what its supporters contend is a problem in how homeowners are insured against flood damage. Currently, the vast majority of flood insurance policies are provided through the government’s National Flood Insurance Program (NFIP).
The bill allows that flood insurance provided by private sector insurance carriers shall be accepted and considered similar to those polices offered by the National Flood Insurance Program (NFIP), provided certain conditions are met.
It also clarifies that the Federal Emergency Management Agency shall consider any period during which a property was continuously covered by private flood insurance to be a period of continuous coverage.
The Flood Insurance Market Parity and Modernization Act passed the House last year by a vote of 419-0. The Financial Services Committee approved the bill this year by a vote of 58-0. The committee has also approved several other flood insurance bills that have not yet advanced.
“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. 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,” said Ross. “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.”
Ross urged his Senate colleagues to quickly pass similar legislation introduced by Sen Dean Heller (R-Nev.).
Earlier this month, Congress extended the NFIP, which was set to expire on Sept. 30, until Dec. 8 as part of a Congressional continuing resolution raising the debt limit and fund the U.S. government.
*This story ran previously in our sister publication Insurance Journal.