NFIP Reform Bill Passes House with Bipartisan Support
Amy Fennell • November 16, 2017
Source: Stamford Advocate - House Passes Bill to Renew Flood Insurance Program
Washington, D.C. - The House on Tuesday , November 14 backed legislation that will increase flood insurance premiums for many property owners to help firm up a program under stress from ever-more frequent and powerful storms. The bill's passage was secured when sponsors made a variety of changes to accommodate lawmakers determined to protect constituents from even steeper rate hikes or from being booted out of the program altogether. The vote was 237-189.
The program is the only flood insurance available to most Americans. Homeowners who live in areas that have a 1 percent chance of being inundated by flood waters in any given year must purchase flood insurance as a condition of having a federally backed mortgage.
But the premiums paid by policyholders are not keeping up with the expense of flood claims. Massive storms such as Hurricane Katrina and Superstorm Sandy generated huge expenses, and with climate change, the scope of flooding seems only to get worse.
The House Financial Services Committee passed legislation in June reauthorizing the National Flood Insurance Program for five years. Some of the changes sought had strong bipartisan support, such as clarifying that flood insurance policies written by private carriers satisfy the government's requirements when it comes to obtaining a federally backed mortgage.
Yet, other aspects of the bill would have increased costs beyond what some Republicans could accept.
Behind the scenes, Texas Rep. Jeb Hensarling, the Republican chairman of the Financial Services Committee, negotiated with Majority Whip Steve Scalise, R-La., on a compromise. The final legislation removed a provision that would have prohibited the program from insuring newly constructed structures after 2021 as well as a provision prohibiting insurance for houses with replacement values exceeding $1 million.
The lawmakers also agreed that the program would account for frequently flooded properties by increasing premium rates based on future flood claims rather than on past flood claims.
"This bill is important. It has really good reforms for taxpayers. It gives real certainty to policyholders," said Scalise, whose congressional district covers most of southeast Louisiana and was devastated by Hurricane Katrina.
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From the Louisiana Department of Insurance: During a press conference today with Governor Jeff Landry, Insurance Commissioner Tim Temple announced that registration for the next round of the Louisiana Fortify Homes Program (LFHP) will open at 8 a.m. on Monday, June 1, and will include 3,000 grants. The registration period for this lottery will be open for three weeks, closing at 5 p.m. on Friday, June 19. During the press conference, Gov. Landry signed HB 1187 by Rep. Paul Sawyer, which will allow Louisiana Citizens Property Insurance Corporation to transfer $50 million in additional Katrina bond assessment funds to the LFHP. Combined with the $30 million in funding the program will receive through taxes and fees on insurance entities, the LFHP will receive a total of $80 million this year. “By lowering overall losses, we can reduce insurance and reinsurance costs, draw more insurers into the market, motivate existing companies to write additional policies and lower insurance premiums,” said Commissioner Temple. “That is exactly what the Louisiana Fortify Homes Program is designed to do.” The list of coastal parishes that are eligible to participate is expanding to include Acadia, Jefferson Davis and Lafayette parishes. Additionally, homeowners who live in the portions of Ascension, Calcasieu, Iberia, Livingston, St. Martin, St. Tammany, Tangipahoa and Vermilion parishes that were previously not included in the program will now be eligible to participate. A map showing the full list of eligible parishes is available on FortifyHomes.La.Gov . “Louisiana is the fastest growing state in the country for Fortified roofs, and that growth is not by accident—it is the result of strong support from Governor Landry and legislators like Chairman Talbot, Chairman Firment and Representative Sawyer, targeted program design, and a clear recognition that strengthening homes is one of the most effective ways to reduce insurance losses,” said Commissioner Temple. “At the end of the day, this program is about more than just roofs. It is about protecting families, it is about strengthening communities, and it is about putting Louisiana in a stronger position—both physically and economically—to face the challenges ahead.” To participate in the lottery, homeowners must register during the June registration period. Homeowners who registered for a previous round but were not selected must register again to participate. People who register on the last day of the registration period have the same chance of being selected as those who register on the first day, so there is no need to rush to register as soon as the period opens. When registering, homeowners will need to upload their homestead exemption, insurance policy declarations page that includes wind coverage, and flood insurance declarations page if the residence is in a flood zone. Homeowners who need assistance obtaining a copy of their homestead exemption should contact their parish tax assessor. Homeowners can contact their homeowners and flood insurance companies or agents for a copy of their policy declarations page. Homeowners are required to create a profile in the LFHP system before registering for the lottery and may do so by visiting the LFHP website and clicking the Login button. Homeowners who previously created a profile may use the same one for this and future rounds. Once the lottery registration period closes, the LFHP will randomly select 3,000 participants and send email notifications to registrants about whether they were selected to participate. These selection notices will be sent via email beginning on Monday, June 22. There are several program requirements that homeowners should be aware of before registering. Those interested in the program are encouraged to review eligibility information and frequently asked questions at FortifyHomes.La.Gov to determine whether their home meets the requirements for the program. If selected to participate in the grant program, homeowners will be financially responsible for having the home evaluated by a FORTIFIED-certified Evaluator as well as costs for the roof upgrade including permits, inspections and construction costs beyond the amount of the grant The LFHP provides grants of up to $10,000 for homeowners to upgrade their roofs to standards set by the Insurance Institute for Business & Home Safety. The program helps Louisiana homeowners strengthen their roofs to better withstand hurricane-force winds.
