House Passes Legislation Expanding Consumer Choice in Flood Insurance Marketplace
On Thursday, the House of Representatives passed H.R. 2901 – Flood Insurance Market Parity and Modernization Act introduced by Representative Dennis Ross (R-FL). Passed by an overwhelming vote of 419-0, H.R. 2901 is a win for the real estate community and property owners.
To insure property against flooding in high risk areas, home owners and businesses essentially have one option – the federal National Flood Insurance Program (NFIP). This monopoly is the result of federal insurance requirements imposed on local communities who wish to participate in the federal program.
If a property owner chooses to buy insurance outside of the NFIP, the government considers that property uninsured. If private insurance coverage rates increase or are no longer available, property owners must return to the NFIP and pay higher rates since they had a “break” in coverage.
H.R. 2901 would change this regulation so property insured in the private market is still considered insured by the government. This bill will help increase competition within the private insurance market and give home owners and businesses more choice when deciding how to insure their property. It should also reduce the reliance on taxpayer dollars used to subsidize the NFIP, which has paid out more than $51 billion in claims from 1978-2014. More competition, more choice, and less at-risk taxpayer dollars is a win for the real estate community, homeowners, and taxpayers.