Insurers Praise Panel Action On Flood Insurance

By Steven Brostoff, Washington Editor

NU Online News Service, July 28, 4:13 p.m.EDT?Insurance agents and companies are praisinglegislation approved by the House Financial Services Committeereauthorizing the National Flood Insurance Program for fiveyears.

Carl Parks, senior vice president of government relations withthe Des Plaines, Ill.-based National Association of IndependentInsurers, said that reauthorization of NFIP will maintain stabilityfor millions of homeowners, prospective home buyers and businessowners across the country who must buy flood insurance.

Justin Roth, director of federal government affairs for theAlexandria, Va.-based Independent Insurance Agents and Brokers ofAmerica, in particular praised an amendment approved by thecommittee aimed at mitigating losses on properties that experiencerepetitive flooding.

The mitigation language would require flood-prone homeowners totake a buyout or take steps to remediate the home's susceptibilityto flooding by elevating the structure or other steps.

Mr. Roth said that initially, the legislation, H.R. 253, wouldhave authorized the NFIP to offer mitigation to all properties thathave had four or more flood losses of at least $1,000 each over thelife of the property.

If the homeowner refused mitigation, Mr. Roth said, NFIP couldhave charged actuarially derived higher rates and the homeownerwould be ineligible for federal disaster assistance.

However, he said, IIABA believed this formula would have causedtoo many homeowners to lose their flood insurance.

He praised the committee for adopting a less severe measure thatwill permit NFIP to target properties that have four or more claimsexceeding $5,000 each.

This new threshold, Mr. Roth said, will target the worstrepetitive flood properties while assuring that most homeownerswill continue to have access to flood insurance.