Statement Praises House Financial Services Subcommittee for Taking First Steps to Reform the National Flood Insurance Program

(Washington, DC) ‒ today released a statement praising the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity for taking concrete steps to reform the National Flood Insurance Program (NFIP) by marking up legislation offered by House Financial Services Committee Chairman Judy Biggert (R-IL).   It also praised Congresswoman Maxine Waters (D-CA) for suggesting stronger mitigation measures to the legislation.   “The Flood Insurance Reform Act of 2011” passed the subcommittee by voice vote.

“This is a concrete first step towards real reform of the NFIP program.   For over 40 years, the federal government, through NFIP has provided significant subsidies for flood coverage.  It has provided the wrong incentives, helping to subsidize development in harm’s way,” said  “The American taxpayer has been put at significant risk through this program. The Biggert bill takes significant strides towards protecting taxpayers and we now look forward to its consideration by the House Financial Services Committee.”

The draft bill contains a number of significant reforms, including requirements for FEMA to update its mapping efforts that reflect’s own proposals.  Under the bill, an advisory council would be established to ensure that FEMA’s flood maps are accurate and up-to-date, reflecting real levels of risk.  Accurate maps ensure that flood insurance rates are fair and allow people to understand the real risks of where they live.

“We are encouraged that the Biggert bill contains requirements for FEMA to update its mapping efforts that reflect our coalition’s own proposals,” said  “While we agree that much more needs to be done to educate people and communities about the mapping process, we oppose any efforts to delay the implementation of updated maps or the subsequent requirement that insurance be purchased.  We believe that maps should be implemented as they are updated; however, the impacts on flood rates should be eased through rate phase-ins.”

In addition, thanked Congresswoman Waters for her suggestion on adding stronger mitigation measures and for allowing the language to be worked on before the full committee markup.

“We are pleased that the Waters language recognizes the need for mitigation for individuals, not just communities.  Severe repetitive loss properties are a significant drain on the program, and these proactive mitigation measures will make NFIP more viable, especially given that every $1 spent on mitigation yields a return of $4 in avoided losses.” also asked that the bill include all properties in the requirement that all rates be risk-based.  The bill would allow some primary residences to continue to pay subsidized rates in perpetuity.  This would continue to undermine the fiscal soundness of the program, putting federal taxpayers at further risk of having to bailout the program. also said the NFIP is in no position to take on additional liabilities.  The coalition requested that the bill not include any additional coverages in the program, including indexing maximum coverage amounts to inflation; providing business interruption coverage; and adding personal living expense coverage.

“Until the entire flood program is risk-based and the almost $18 billion debt is paid off, the federal government should not be putting taxpayers at further risk through expansions in the flood program,” said is a national coalition made up of a diverse set of voices united to support environmentally-responsible, fiscally-sound approaches that promote public safety. The Coalition strongly opposes legislative proposals that encourage people to build homes in hurricane-prone, environmentally-sensitive areas by creating new programs that directly or indirectly subsidize their homeowner’s insurance.