The U.S. has recently experienced a number of significant flooding events. The federal government will continue to foot the bill for the majority of flood claims through the National Flood Insurance Program, which issues federal flood policies to residents in flood areas.
Recently, there has been increasing appetite for private insurers to offer alternative flood insurance solutions. This is a good thing for consumers, as private flood policies can address shortcomings that exist with NFIP policies. Removing some of this burden from the federal government also reduces the overall exposure for U.S. taxpayers and can begin to rein in a program that was $23 billion in debt prior to these events.
Bipartisan legislation has been introduced in both chambers that provides a simple solution that reinforces the way the private market works. The Flood Insurance Market Parity and Modernization Act (H.R. 2901/S. 1679) clarifies the definition of private flood insurance and ensures lenders can accept private market flood insurance policies for homeowners.
The House approved H.R. 2901 unanimously. When Congress addresses funding the government for the remainder of the fiscal year, the Senate should enact this legislation as well.