House GOP to unveil 5-year flood insurance bill

House GOP to unveil 5-year flood insurance bill
© Moriah Ratner

A Republican plan to extend federally backed flood insurance includes several measures meant to reduce costs and bolster private alternatives to the debt-riddled program.

House Financial Services Committee Republicans will propose a five-year extension of the National Flood Insurance Program (NFIP), including bipartisan proposals meant to make federal flood insurance less expensive and private flood insurance more accessible, according to a document obtained by The Hill.

NFIP offers flood insurance for homeowners in coastal and other vulnerable areas. Established in 1968 in response to a lack of private insurance options, NFIP largely remained solvent until costs from covering Hurricane Katrina and Superstorm Sandy led to $23 billion in debt.

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Funding for NFIP expires in September, and lawmakers in both houses and parties have teamed up on ways to renew and reform the program.

Deadly floods throughout the Midwest and South over the past two years spurred lawmakers to action in the previous session of Congress, but lawmakers failed to get a reform bill to President Obama’s desk.

The GOP proposal combines several reform efforts meant to fuel an emerging private flood insurance industry, which lawmakers say would relieve the pressure on NFIP. The Republican plan would clarify that private insurance counts toward a federal rule that forces coastal and at-risk homeowners to buy insurance. That proposal passed the House unanimously last year in a bill sponsored by Rep. Dennis Ross (R-Fla.).

The Republican plan would also give insurance agencies more flexibility to insurers outside of NFIP, and make the Federal Emergency Management Agency publish more data about flood risks that would guide private policywriters.

Much of the GOP plan focuses on modernizing how FEMA and NFIP assess flood risk. The proposal calls for technological upgrades to how FEMA maps flood-prone areas and assesses structural risks for areas where flood insurance is mandated. The plan also calls for greater local planning and protection in flood-prone areas.

The plan also seeks to give NFIP more financial tools to manage and pay-down its debt.

Both the House Financial Services Committee and Senate Banking Committee have held several hearings this year on flood insurance reform. Though often bitterly divided along ideological and partisan lines, lawmakers from both sides say a bipartisan flood insurance reform bill is both essential and within reach.