The National Flood Insurance Program has to manage it loss coverage policy to keep it viable and accessible to a broader base of policyholders, a Florida congressman has proposed.
Congressman Francis Rooney promised his constituents that he will make sure NFIP members in his home state will get a better deal as the legislature buckles down to work on the reauthorization of the program, which will expire on September 30.
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In a report by local media
BeachTalk.com, the congressman focused on repetitive losses, which he explained are a drain on federal resources and cause disproportionate rate hikes, which is making flood insurance inaccessible to most homeowners.
Repetitive losses arise from properties that frequently experience damage from regular flooding, which use up federal funds to repair and rebuild. These properties are usually located near water systems such as rivers and lakes. Florida does not contribute to the current repetitive loss portfolio of the NFIP.
“We’re paying out a lot more than we’re getting back,” he said. “We have to make our (Florida) issues known,”
BeachTalk quoted him as saying.
Congressman Rooney put forth his proposal in a luncheon meeting with realtors in Fort Myers.
The federal government currently manages the NFIP, as administered by the Federal Emergency Management Agency. As lawmakers draft reforms to the program, they will also have to contend with the $25 billion debt incurred by the agency to cover massive losses arising from a succession of major weather events in recent years.
The report also explained that private insurers have pulled out of the program after it proved unviable due to mounting costs. But Rooney said the private sector has expressed interest in participating in the program with the reauthorization.
According to
BeachTalk, renewed private sector involvement in the program “could ultimately make the insurance market more competitive and drive premiums down.”
In the same report, Karen Swanbeck, Royal Palm Coast Realtor Association chief executive, said that friendlier premium prices could expand the market for flood insurance. She explained that property owners who have paid off their homes tend not to take out flood coverage because of its prohibitive cost. If increased competition drives down prices, she said more owners might buy into the insurance.
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