The House of Representatives voted today to advance legislation that will foster a private flood-insurance market, and the National Association of Realtors® is standing firmly behind the effort.
“Consumers who wish to purchase insurance in the private market should have the freedom to do so,” said NAR President Tom Salomone. “This legislation will help foster a vibrant private flood insurance market while giving consumers the flexibility to return to the National Flood Insurance Program at a reasonable cost if they choose to.”
The bill passed 419-0.
Under current rules, homeowners must maintain a minimum amount of flood insurance coverage to remain eligible for the lowest rates available within the NFIP. However, if a consumer moves to a private flood insurance policy, they are considered to have experienced a “break” in coverage, regardless of the terms of that policy.
Should the consumer later decide to return to the NFIP – whether because their private option went up in price or is no longer available – that “break” in coverage will result in a rate hike for the consumer.
To address that concern, the “Flood Insurance Market Parity and Modernization Act” clarifies that private flood insurance that meets state law is sufficient to fulfill the standard of continuous coverage.
The National Association of Realtors® wrote to members of the House Financial Services Committee earlier this year asking for their support on the bill, which NAR President Tom Salomone called “a step in the right direction as we work to reauthorize and modernize the NFIP.”
H.R. 2901 later passed the Committee by a unanimous 53-0 vote.
Passage of H.R. 2901 in the full House comes as NAR and the SmarterSafer Coalition continue to push for reforms to and reauthorization of the NFIP. NAR estimates that as many as 40,000 home sales stalled every month when Congress last allowed the program to expire, and a September 2017 deadline now looms over the program.
In a joint op-ed in The Hill earlier this month, NAR President Tom Salomone noted that the clock is ticking to reauthorize the program.
“Making critical reforms to the NFIP before it’s up for renewal in 2017 is a big challenge,” Salomone said in the op-ed. “However, the path forward has become so clear, and the stakes so high, that we are urging Congress to rescue the program with a series of common sense reforms before it’s too late.”
H.R. 2901 now heads to the Senate for consideration.