On November 14, 2017, the House of Representatives, on a vote of 237-189, passed HR 2874: The 21st Century Flood Reform Act to reauthorize and reform the National Flood Insurance Program (NFIP). The bill meets all six of NAR's reform principles. Specifically, the Act:
- Reauthorizes the NFIP for 5 years;
- Limits maximum flood insurance premiums to no more than $10,000 per year for residential properties;
- Preserves the practice of grandfathering for property owners who built to code;
- Removes hurdles to the private flood insurance market, which often offers better coverage at lower cost than the NFIP;
- Authorizes $1 billion in pre-flood mitigation assistance grants to elevate, flood proof, buyout or mitigate high-risk properties;
- Doubles increased cost of compliance (ICC) coverage in the standard NFIP policy so policyholders may access up to $60,000 for property mitigation prior to a flood;
- Better aligns NFIP rates to flood risk, particularly for lower risk and value properties inland of the coast;
- Enables communities to develop more accurate and granular flood maps like North Carolina’s,, and streamlines the map appeals process;
- Improves the claims process in light of problems experienced after Superstorm Sandy;
- Addresses issues with repeatedly flooding properties that account for 2 percent of NFIP policies but 25 percent of the claim payments; and
- Strengthens the overall solvency of the program over the long term.
Now that the House has completed its work, the focus shifts to the Senate where the Banking Committee has not marked up its version of NFIP reauthorization/reform legislation. With the December 8 deadline looming, NAR is urging the Senate to act quickly and will continue working with members of Congress to ensure that the NFIP does not shut down in the interim.