Congress must adopt legislation that encourages the availability and affordability of property insurance, including a long-term reauthorization of the National Flood Insurance Program (NFIP) and natural disaster coverage.
Affordable property insurance is not widely available.
Insurers have responded to recent natural disasters by raising premiums or declining to write policies in many parts of the United States. Because the standard homeowner’s policy does not cover flooding, windstorms or earthquakes, most Americans rely on the NFIP or a state program for coverage for natural disasters. Without a federal role, affordable property insurance would not be consistently available.
Short extensions to the NFIP do not provide market certainty.
Since September 2008, Congress has approved six short-term extensions and allowed the NFIP to expire twice. Homebuyers and small business owners require certainty to make the long-term real estate investments that are critical to our nation’s economic recovery.
Taxpayers are now subsidizing under-insured properties.
Today the federal government mostly reacts to natural disasters by providing financial assistance to victims. For example, following Hurricane Katrina, $26 billion went directly to under-insured property owners, according to the GAO. Those are taxpayer expenditures that would not have been necessary, if affordable property insurance for these events was more widely available.
Forward-looking U.S. policies will reduce taxpayer burden.
By becoming more proactive, i.e. ensuring that property owners have insurance as well as incentives to mitigate property against the full range of natural disasters, the federal government could reduce the amount of disaster relief taxpayers would have to provide.
House actions to date:
Short extensions to the NFIP do not provide market certainty.
Since September 2008, Congress has approved six short-term extensions and allowed the NFIP to expire twice. Homebuyers and small business owners require certainty to make the long-term real estate investments that are critical to our nation’s economic recovery.
Taxpayers are now subsidizing under-insured properties.
Today the federal government mostly reacts to natural disasters by providing financial assistance to victims. For example, following Hurricane Katrina, $26 billion went directly to under-insured property owners, according to the GAO. Those are taxpayer expenditures that would not have been necessary, if affordable property insurance for these events was more widely available.
Forward-looking U.S. policies will reduce taxpayer burden.
By becoming more proactive, i.e. ensuring that property owners have insurance as well as incentives to mitigate property against the full range of natural disasters, the federal government could reduce the amount of disaster relief taxpayers would have to provide.
House actions to date:
- The House has approved a series of short-term NFIP extensions.
- The House Financial Services Committee held a hearing on H.R. 2555 (Klein, D-FL), the Homeowners Defense Act, which offers federal reinsurance for state property insurance programs for natural catastrophes.
- The Senate approved H.R. 4213 that extends the NFIP to December 31, 2010.
- Reauthorize the NFIP long-term to provide property insurance market certainty.
- Improve the availability and affordability of property insurance by approving legislation, including H.R.2555, to encourage state property insurance programs to proactively address the need for much-needed insurance coverage.
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