A bipartisan bill was introduced in the Senate to reauthorize the National Flood Insurance Program for six years while instituting a cap on premiums and other reforms.
The Sustainable, Affordable, Fair, and Efficient (SAFE) National Flood Insurance Program Reauthorization Act is designed to tackle systemic problems with flood insurance, put it back on solid fiscal ground, and focus more on prevention and mitigation to spare the high cost of rebuilding after flood disasters. The bipartisan bill was sponsored by Sens. Marco Rubio (R-FL), Bob Menendez (D-NJ), John Kennedy (R-LA), Chris Van Hollen
(D-MD), Elizabeth Warren (D-MA), Thad Cochran (R-MS), Cory Booker (D-NJ), and Bill Nelson (D-FL).
The current National Flood Insurance Program is set to expire on Sept. 30, 2017.
The SAFE National Flood Insurance Program Reauthorization Act would cap annual increases to 10 percent. Currently, premiums increase by up to 25 percent every year, depressing property values, creating affordability challenges, and discouraging participation in the program.
It would also freeze interest payments and establish new controls for private insurance company compensation to reinvest in proactive mitigation efforts and affordability measures. It would also provide robust funding levels for large-scale, community-wide mitigation efforts, and mitigation assistance programs, which have a 4:1 return on investment and are the most effective way to reduce flood risk.
Additionally, it would increase the maximum limit for ICC coverage to better reflect the costs of mitigation projects and expands eligibility to encourage more mitigation before natural disasters strike.
“This bill helps ensure long-term stability, while providing much needed reforms to protect the program’s policyholders,” Rubio said. “It is past time for the federal government to take a more proactive approach in addressing the underlying risk affecting flood prone communities. I am proud to have worked with this bipartisan group to make our National Flood Insurance Program more viable, sustainable and accountable.”
The bill would also authorize funding for Light Detection and Ranging (LiDAR) technology for more accurate mapping of flood risk across the country, reducing confusion and generating better data.
Further, it would cap compensation for write your own (WYO) companies to 22.4 percent of written premiums and create new oversight measures for insurance companies and vendors. In addition, it would provide FEMA with greater authority to terminate contractors that have a track record of abuse.
It would also reform the claims process based on lessons learned after Superstorm Sandy and other disasters.
“Americans deserve a National Flood Insurance Program that is sustainable for taxpayers, affordable for homeowners, and accountable to everyone,” Menendez said. “If we want a more sustainable system, the answer isn’t to slam homeowners with even higher premiums. This legislation puts the lessons we learned after Superstorm Sandy into action, levels the playing field for policyholders, and attacks the NFIP’s rampant waste and abuse to create real savings and greater investment in mitigation and resiliency efforts to make our residents and communities safer.”
It would also level the playing field for policyholders during appeals and litigation by holding FEMA to strict deadlines for payments to homeowners, ban aggressive legal tactics that prevent homeowners from filing legitimate claims, and end FEMA’s reliance on outside legal counsel from expensive for-profit entities.
“It’s time to come together to pass a long-term, bipartisan NFIP reauthorization that makes much-needed reforms to the flood insurance program,” Warren said. “Our bill will make changes that extend affordable flood insurance protection to everyone who needs it and that places more emphasis on better flood mapping, prevention, and resiliency.”
Last week, U.S. Sens. Kirsten Gillibrand (D-NY), Bill Cassidy (R-LA), and Shelley Moore Capito (R-WV) also introduced legislation to reauthorize the NFIP. Their bill would reauthorize it for 10 years and allow NFIP policyholders the option to purchase a private flood insurance policy.