Recent natural disasters have brought a renewed focus upon Congress’ efforts to improve our nation’s flood insurance program (NFIP).
The NFIP was created in 1968, and like many federal programs, the intent is noble but the execution has left a lot to be desired. The reality is harsh: The NFIP has borrowed over $30 billion from taxpayers, regularly operates an annual deficit, and operates (is there another word you can use here or right before?) as a monopoly service provider for millions. It’s a program in need of greater accountability and additional reforms to keep it efficient and competent.
That changes today. The House is considering the 21st Century Flood Reform Act, a collection of seven bills that injects private market competition and pragmatic reforms to update this floundering program.
Among the many reforms the bill makes, it provides affordable coverage for policyholders by decreasing the annual cap on an individual’s annual rate increases and caps surcharges on low-risk properties. At the same time, it improves the financial soundness by gradually increasing rates for certain properties to meet actuarial risk.
Perhaps most importantly, the legislation would help establish a private market for flood insurance, which will increase access, competition, and consumer choice. That means real money saved for real people.
Taxpayers deserve a streamlined, efficient flood insurance program with real accountability, and policyholders in high-risk areas for flooding deserve stability and market-based rates for their insurance. The 21st Century Flood Reform Act helps us get there.
Read more here.