WASHINGTON, Jan. 30, 2014 /PRNewswire-USNewswire/ -- Legislation approved by the Senate today to undo reforms to the National Flood Insurance Program doesn't address problems facing homeowners at risk of flooding, according to the National Association of Mutual Insurance Companies.
"The legislation approved today by the Senate doesn't make flood insurance cheaper, it just makes the American taxpayer foot the bill for other peoples' flood insurance," said Jimi Grande, senior vice president of federal and political affairs for NAMIC. "It continues to hide the true risk that homeowners in flood-prone areas are facing and removes incentives for homeowners to protect their properties from flooding."
The legislation delays implementation of the Biggert-Waters Flood Insurance Reform Act, which was signed into law in 2012 to strengthen the NFIP by gradually raising premiums to risk-based levels for many subsidized flood insurance policies and requiring mitigation for repeatedly flooded properties.
"Congress passed these reforms because the NFIP had become unsustainable, with a debt of more than $20 billion to the taxpayers that it had no hope of ever repaying," Grande said. "The 2012 reforms will help the NFIP to raise revenue needed to meet its obligations to policyholders across the country. And as rates increase for some homeowners, it will also hopefully encourage them to mitigate against flooding and prevent a loss from happening in the first place."
As Biggert-Waters took effect, stories of extreme premium increases were reported. Grande said that Congress should provide a solution for these particular cases, but not through abandoning reform completely.
"As happens in reform legislation, some extreme cases will arise as an unintended consequence," Grande noted. "Congress should absolutely help those facing true hardship, but the Senate bill doesn't do that. It doesn't address any of the reasons properties are at such a high risk of flooding, and it won't help a single homeowner protect his or her home or belongings from a flood. Instead, it lets elected officials say they lowered flood insurance premiums during an election year."
NAMIC is the largest property/casualty insurance trade association in the country, serving regional and local mutual insurance companies on main streets across America as well as many of the country's largest national insurers. Our 1,400 member companies serve more than 135 million auto, home and business policyholders, and write more than $196 billion in annual premiums.
Director, Federal Public Affairs
SOURCE National Association of Mutual Insurance Companies