In a letter to House Financial Services Committee Chairwoman Judy Biggert, SmarterSafer.org, a coalition of taxpayer advocates, environmental groups, insurance companies and others, applauded her efforts to reform the National Flood Insurance Program (NFIP) while urging that further improvements can be made to the bill.
The draft bill is described as a step in the right direction to ensuring that the program can continue to provide needed flood insurance coverage and protect taxpayers while not incentivizing development in harmful and environmentally sensitive areas. However, the coalition also requested that mapping not be delayed due to community concerns and that the program not take on additional liabilities.
“For over 40 years, the federal government, through NFIP has provided significant subsidies for flood coverage. This has provided the wrong incentives, helping to subsidize development in harm’s way,” said SmarterSafer.org. “This has also put the American taxpayer at significant risk.”
The draft bill contains a number of significant reforms, including requirements for FEMA to update its mapping efforts that reflect SmarterSafer.org’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 pleased that your bill contains requirements for FEMA to update its mapping efforts that reflect our coalition’s own proposals,” said SmarterSafer.org. “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.”
SmarterSafer.org also asked that the bill include all properties in the requirement that rates be risk-based. The draft 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.
In addition, SmarterSafer.org 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 SmarterSafer.org.
SmarterSafer.org 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.