Congress Once Again Looks at Private Flood Insurance


Copyright: IrinaK

In the wake of Hurricanes Harvey, Irma, and Maria, Congress tried once again to enact NMHC/NAA supported legislation to lessen future taxpayer exposure to flooding events by increasing the role of the private sector in the flood insurance marketplace.


As part of a must-pass bill to reauthorize the Federal Aviation Administration (FAA), the House attached the Flood Insurance Market Parity and Modernization Act which aims to expand coverage options for at-risk property owners by clarifying that flood insurance offered by private carriers outside of the NFIP meets the mandatory purchase requirements in place today. Of particular note is the bill’s language that ensures both private and NFIP coverage satisfies the federal government’s requirement of “continuous coverage” and protects policyholders from seeing rate hikes should they wish to return to the NFIP coverage at a later date.


Despite strong bipartisan support for the bill, this provision was ultimately stripped out of the package before it was considered by the full Senate. Congress now has until December 8, 2017, to reauthorize the NFIP, and NMHC/NAA will continue to strongly urge lawmakers to enact a long-term reauthorization to ensure that flood coverage continues to be available at all times, in all market conditions for every at-risk rental property. Given the short timeline Congress is facing and the other legislative items on the docket before the end of the year, another short-term extension of the program could be on hand.


Despite this, and given the financial impact of this hurricane season on the fiscal state of the NFIP, Congress must take action to shore up the NFIP. As the NFIP has already reached the borrowing cap imposed by the U.S. Treasury, Congress must act without delay to increase the program’s borrowing authority so that NFIP can meet its claim obligations. It is likely that Congress will address this in a future disaster aid package.


NMHC/NAA continues to push for reforms to the NFIP that improve the accuracy of the flood maps; increase apartment communities’ access to current flood mitigation funding and programs; expand NFIP to allow for umbrella policies; include business interruption coverage for rental properties; and provide replacement cost value (RCV) instead of actual cost value (ACV) to damaged apartment properties.


More information on the NFIP and our work to reauthorize it can be found on our NFIP resources page