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house Bill H.R. 2874

Should the National Flood Insurance Program be Reauthorized and Reformed?

Argument in favor

The National Flood Insurance Program needs to be reauthorized so that it can continue to help American families harmed by floods along with reforms to stabilize the program by ensuring that homeowners pay premiums that fairly reflect their risk.

Raymond's Opinion
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11/14/2017
Not a single family should be left behind in the wake of a natural disaster. Reforming these insurance programs could be a good start in getting disaster victims the care they need.
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C's Opinion
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11/14/2017
Help families in existing homes in flood prone areas-once! Insist on relocation after first claim NO new flood insurance for new construction in known flood plains. Global warming is only going to make this more expensive.
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Ethan's Opinion
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11/15/2017
We need to support family’s who are in flood zones. No one can prepare for a life shattering event like a flood and so we should help to make it easier to come back from that.
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Argument opposed

This bill would make flood insurance less affordable by raising premiums, fees, and surcharges on policyholders. The private flood insurance market should be developed more slowly than this bill would allow for.

Amalthea's Opinion
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11/14/2017
Offer them a buyout program that allows them to purchase a fair value home elsewhere. We have to start moving people or of the areas given our blatant disregard for climate change.
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Brandyn's Opinion
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11/14/2017
We shouldn’t incentivize building in areas prone to flooding. If we do, premiums and fees charged must be higher than they currently are.
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Adelynn's Opinion
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11/14/2017
We can’t keep subsidizing building in flood prone areas. This will only increase the economic impact which future storms.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
  • The house Passed November 14th, 2017
    Roll Call Vote 236 Yea / 189 Nay
      house Committees
      Committee on Financial Services
    IntroducedJune 12th, 2017

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What is House Bill H.R. 2874?

This bill would authorize the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA), to enter into and renew flood insurance policies through fiscal year 2022 — authority that’s set to expire after December 8, 2017. It would also change annual limits on premium increases for NFIP insurance, and require FEMA to provide financial assistance through state programs for low-income families to buy NFIP insurance.

FEMA would be required to provide policyholders with:

  • An annual explanation of premiums;

  • Historical flood data to property owners upon request;

  • Data related to NFIP risks and premiums, including community-level data, through a publicly available data system.

FEMA would be required to commission an annual independent actuarial review of the financial status of NFIP. The Government Accountability Office would have to report on:

  • The feasibility of reducing flood insurance premiums and eliminating the need for flood insurance coverage by authorizing flood damage savings accounts;

  • Flood insurance requirements for mortgages.

Penalties for violations of the flood insurance requirement for mortgages would be increased.

The NFIP’s community rating program would be revised to require FEMA to provide premium credits in communities that protect natural and beneficial floodplain functions. NFIP coverage would be revised for:

  • Properties that have incurred multiple flood losses;

  • Properties that have exceeded specified levels of claim payments;

  • Certain high-risk properties.

FEMA would be required to allow a Write Your Own Company — which writes and services federal standard flood insurance policies in its own name — to sell private flood insurance.

Impact

Homeowners with flood insurance policies; insurance companies; the NFIP; and FEMA.

Cost of House Bill H.R. 2874

The CBO estimates that enacting this bill would reduce spending by $187 million over the 2018-2027 period and increase revenues by about $4 million over the same period.

More Information

In-DepthSponsoring Rep. Sean Duffy (R-WI) introduced this bill to reauthorize and reform the NFIP, which owes $25 billion to the U.S. Treasury, and end what he views as an unfair system of subsidies. Duffy argues that the practice of subsidizing premiums for those who live near coasts and waterways is unfair to households outside of floodplains who fund the subsidies through their tax dollars.

Duffy said that subsidies are going to “wealthy homeowners on the coast” and that his bill would “gently move these people to the point they are paying premiums commensurate with the risk.”

House Democrats have expressed their opposition to this bill on the grounds that it would “make flood insurance less affordable, less available, and less fair for consumers” and added in the bill’s report:

“H.R. 2874 would make flood insurance less affordable by raising premiums, fees, and surcharges on policyholders, while doing nothing to address the NFIP’s debt or the billions of dollars being spent on interest to service that debt.”

This legislation passed the House Financial Services Committee on a 30-26 vote.


Media:

Summary by Eric Revell

(Photo Credit: EEL_Tony / iStock)

AKA

21st Century Flood Reform Act

Official Title

To achieve reforms to improve the financial stability of the National Flood Insurance Program, to enhance the development of more accurate estimates of flood risk through new technology and better maps, to increase the role of private markets in the management of flood insurance risks, and to provide for alternative methods to insure against flood peril, and for other purposes.

    Not a single family should be left behind in the wake of a natural disaster. Reforming these insurance programs could be a good start in getting disaster victims the care they need.
    Like (22)
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    Offer them a buyout program that allows them to purchase a fair value home elsewhere. We have to start moving people or of the areas given our blatant disregard for climate change.
    Like (116)
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    We shouldn’t incentivize building in areas prone to flooding. If we do, premiums and fees charged must be higher than they currently are.
    Like (52)
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    We can’t keep subsidizing building in flood prone areas. This will only increase the economic impact which future storms.
    Like (48)
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    While I hesitate to punish low-income families with higher premiums, it's time to rethink how we allocate and populate land in flood prone areas. We should allow for and/or encourage the reemergence of wetlands as natural flood barriers. In addition, money dedicated to subsidizing flood insurance should instead be used to assist those people in flood zones with relocation.
    Like (40)
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    Private insurance won’t protect them? Then don’t ask taxpayers to do so.
    Like (20)
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    It’s hard to vote on this. While I agree we cannot re-authorize flood insurance, we are punishing lower income families during times of tragedy. But at the same time, we need to start thinking about where we allow our population to live.
    Like (13)
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    Help families in existing homes in flood prone areas-once! Insist on relocation after first claim NO new flood insurance for new construction in known flood plains. Global warming is only going to make this more expensive.
    Like (10)
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    Let the private sector handle this and remove this from the table. Get the government back to a limited state instead of over-regulating.
    Like (9)
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    We need to support family’s who are in flood zones. No one can prepare for a life shattering event like a flood and so we should help to make it easier to come back from that.
    Like (7)
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    Until we’re willing to admit that climate change is real and invest money into science and programs that slow down the pace of rising temperatures, we will see MORE homeowners facing financial disaster from storms that will only become worse. Denial has lead us here. Climate change is real! The time to act is now!
    Like (5)
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    Please vote no. This bill needs mote work that will make flood insurance affordable.
    Like (4)
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    It needs a less painful reform, like a buyout program. Currently there are people stuck in houses that they can't leave because they can't sell them.
    Like (4)
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    The NFIP needs to be repealed and let the state or the people take care about there insurance.
    Like (4)
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    The current flood insurance policy is being exploited at the taxpayers expense. Mandatory resettlement AWAY from flood prone areas should be a MUST prior to any policy payments being made. Time to fix a very well meaning but slightly flawed idea...much like the A. C. A.
    Like (4)
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    All across Europe and South America you will find settlements that were abandoned because of their location. America needs to wake up to the impact Climate change will have to flood-prone areas. Why not use these funds to allow homeowners to rebuild above the areas at risk? The old saying goes: insanity is continuing to do the same thing over and over and expecting a different outcome.
    Like (4)
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    The government should not be in the insurance business. That’s what the private sector is for, just like every other kind of insurance.
    Like (4)
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    This insurance can NOT continue to be such a burden on homeowners. How much more can we pay in insurance and taxes. It doesn't pay to own a home anymore
    Like (4)
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    I really don’t see where flood or earthquake insurance is a great advantage to anyone. The premiums are astronomically high and the deductibles are just as high. It does not make sense to offer an insurance that really dose not meet your needs.
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    I don’t want to subsidize people building in known flood zones
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