Flood insurance program needs to be revamped: Barr
LEXINGTON, Ky. (WTVQ) – U.S. Rep. Andy Barr (KY-06) and U.S. Rep. Scott Peters (D-CA) reintroduced Friday the bipartisan Build for Future Disasters Act to end the costly cycle of building, flooding, and rebuilding perpetuated by the National Flood Insurance Program (NFIP).
The Build for Future Disasters Act of 2021 would end NFIP subsidies for newly constructed properties in areas vulnerable to flooding.
Properties built during 2025 or later would be subject to rates that reflect up-to-date flood risk information. These new constructions would not qualify for a subsidy, while structures built before 2025 in flood zones or re-mapped into flood zones would still be eligible for grandfathering subsidies.
The bill also requires the U.S. Government Accountability Office to study the feasibility and implications of lowering all subsidies to a point that puts the NFIP on a path to stronger financial footing.
Together, this would reduce taxpayer burden, stop growing government risk, and quash the implication the risk must be low if insurance is cheap.
The bill’s introduction comes shortly after the Federal Emergency Management Agency (FEMA) announced new plans to update the NFIP’s risk rating methodology. FEMA’s Risk Rating 2.0 would better reflect the real risk of flooding of properties with more advanced actuarial tools and catastrophe models.
“This bill shows that pragmatic NFIP reforms can and should be bipartisan,” said Barr. “The NFIP provides insurance coverage for Americans across the country, but the Program is unsustainable on its current path. These common sense reforms will prevent constant deficits and taxpayers from being on the hook for rock bottom insurance rates on repetitive loss properties or new construction in areas that are dangerously prone to flooding.”
“Our bipartisan bill would help homeowners understand the real flood risk of their home, and stop the cycle of rebuilding in unsafe places – crucial as we prepare for the climate-induced disasters of the future,” added Peters. “Absent Risk Rating 2.0’s full implementation, Rep. Barr and I stand ready to push forward our legislation to accomplish this important goal. We must encourage regional resiliency planning and end the future subsidies that waste taxpayer dollars and create extensive suffering.”
“I’ve said it before, ‘floods and hurricanes happen,’ the real disaster is we haven’t changed our habits, we haven’t stopped subsidizing construction in flood-prone areas,” said Craig Fugate, former FEMA Administrator. “We need to quit growing the risk. This legislation would go a long way toward tackling that problem by ensuring federal insurance for new construction in flood-prone areas reflects real flood risk.”