House Passes Bill to Renew, Overhaul Federal Flood Insurance

The House on Tuesday passed a bill to renew and overhaul the National Flood Insurance Program (NFIP) after months of negotiations between fiscal conservatives and lawmakers from coastal areas.

Called the 21st Century Flood Reform Act, the bill renews the debt-riddled NFIP for five years, updates federal flood mapping requirements and seeks to bolster an emerging private flood insurance market.

The bill passed 237-189 along party lines, a week after Republicans struck a deal over proposed increases to flood insurance premium caps.

That provision is one of several included in the bill meant to reduce the financial burden on NFIP, which faces more than $30 billion in debt.

NFIP was created in 1968 to fill gaps left by a lack of affordable private flood insurance options. The program provides flood insurance to residents of flood-prone areas, where the insurance is federally mandated, and stayed largely solvent until the toll of hurricanes Katrina and Sandy saddled it with more than $24 billion in debt.

Lawmakers negotiated over fixes to the NFIP for several months, with the program facing a December deadline for its renewal. Republicans have sought to downsize the federal program, and its ballooning debt, in hopes of fostering a private market for flood insurance.

Democrats have been open to more flood insurance privatization but have also pushed back on some GOP efforts to reduce the program’s cost and raise premiums.

Rep. Maxine Waters (D-Calif.), the top Democrat on the House Financial Services Committee, said it was “unconscionable” to raise flood insurance premiums after the summer hurricanes.

“This bill will punish lower- and middle-class Americans with increased premiums, surcharges and reserve fund assessments,” Waters said. “In the wake of a historic hurricane season that devastated so many communities, it is unconscionable that we are considering a bill that would make flood insurance less affordable.”

The House Financial Services Committee passed several NFIP overhaul bills with bipartisan support last summer before the recent hurricanes exploded the program’s debt from $25 billion to more than $35 billion. But conservative lawmakers and GOP members from coastal states opposed a plan to raise premium caps for NFIP policies to $18,000.

GOP leaders struck a deal last week to lower fee hikes for homes that suffer repeated flooding.

The House voted just last month to give NFIP a $16 billion bailout in the wake of hurricanes Harvey, Irma and Maria.

Much of the bill focuses on modernizing how FEMA and NFIP assess flood risk.

The proposal calls for technological upgrades to how FEMA maps flood-prone areas and assesses structural risks for areas where flood insurance is mandated. The plan also calls for greater local planning and protection in flood-prone areas.

The plan also seeks to give NFIP more financial tools to manage and pay-down its debt.

The overall reform efforts are focused on lowering flood insurance rates, boosting the private flood insurance market, modernizing flood zone mapping and encouraging flood mitigation practices for homebuilders and land developers.