The Homeowner Flood Insurance Affordability Act of 2014 () was a
United States Congress
The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washing ...
bill
Bill(s) may refer to:
Common meanings
* Banknote, paper cash (especially in the United States)
* Bill (law), a proposed law put before a legislature
* Invoice, commercial document issued by a seller to a buyer
* Bill, a bird or animal's beak
Plac ...
that would have delayed the increases in
flood insurance
Flood insurance is the specific insurance coverage issued against property loss from flooding. To determine risk factors for specific properties, insurers will often refer to topographical maps that denote lowlands, floodplains and other areas tha ...
premiums that were part of the
Biggert–Waters Flood Insurance Reform Act of 2012
The National Flood Insurance Program (NFIP) is a program created by the Congress of the United States in 1968 through the National Flood Insurance Act of 1968 (P.L. 90-448). The NFIP has two purposes: to share the risk of flood losses through floo ...
.
The reforms from that law were meant to require flood insurance premiums to actually reflect the real risk of flooding, which led to an increase in premiums.
At the time of the bill, the
National Flood Insurance Program
The National Flood Insurance Program (NFIP) is a program created by the Congress of the United States in 1968 through the National Flood Insurance Act of 1968 (P.L. 90-448). The NFIP has two purposes: to share the risk of flood losses through floo ...
was $24 billion in debt.
The bill passed in the
United States Senate
The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States.
The composition and pow ...
during the
113th United States Congress
The 113th United States Congress was a meeting of the legislative branch of the United States federal government, from January 3, 2013, to January 3, 2015, during the fifth and sixth years of Presidency of Barack Obama, Barack Obama's presiden ...
, but was superseded by a similar bill which had originated in the
United States House of Representatives
The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the Lower house, lower chamber of the United States Congress, with the United States Senate, Senate being ...
. That bill ultimately became law as the
Homeowner Flood Insurance Affordability Act of 2013
The Homeowner Flood Insurance Affordability Act of 2013 () is a bill that would reduce some of the reforms made to the federal flood insurance program that were passed two years prior. The bill would reduce federal flood insurance premium rates fo ...
.
Background
National Flood Insurance Program
The National Flood Insurance Program (NFIP) is a program created by the
Congress of the United States
The United States Congress is the legislature of the federal government of the United States. It is Bicameralism, bicameral, composed of a lower body, the United States House of Representatives, House of Representatives, and an upper body, ...
in 1968 through the
National Flood Insurance Act of 1968 The National Flood Insurance Act of 1968 is legislation enacted in the United States that led to the creation of the National Flood Insurance Program (NFIP).Haddow, George D. and Jane A. Bullock, 2003, ''Introduction to Emergency Management'', Amste ...
(P.L. 90-448). The program enables property owners in participating communities to purchase
insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
protection from the government against losses from flooding. This insurance is designed to provide an insurance alternative to disaster assistance to meet the escalating costs of repairing damage to buildings and their contents caused by
flood
A flood is an overflow of water ( or rarely other fluids) that submerges land that is usually dry. In the sense of "flowing water", the word may also be applied to the inflow of the tide. Floods are an area of study of the discipline hydrol ...
s.
The National Flood Insurance Program serves close to 5 million people.
When the program began in 1968, there were few private insurers willing to cover floods due to the associated risks.
At present, approximately 5.5 million properties are covered by the program, with twenty percent of them receiving discount rates of less than half what a private insurance company would charge them.
According to critics of the program, the government's subsidized insurance plan "encouraged building, and rebuilding, in vulnerable coastal areas and floodplains."
Stephen Ellis, of the group
taxpayers for Common Sense
Taxpayers for Common Sense (TCS) is a nonpartisan federal budget watchdog organization based in Washington, D.C., in the United States. TCS is a 501(c)(3) non-profit organization; its 501(c)(4) affiliate is Taxpayers for Common Sense Action (TCS ...
, points to "properties that flooded 17 or 18 times that were still covered under the federal insurance program" without premiums going up.
Biggert–Waters Flood Insurance Reform Act of 2012
The
Biggert–Waters Flood Insurance Reform Act of 2012
The National Flood Insurance Program (NFIP) is a program created by the Congress of the United States in 1968 through the National Flood Insurance Act of 1968 (P.L. 90-448). The NFIP has two purposes: to share the risk of flood losses through floo ...
was "designed to allow premiums to rise to reflect the true risk of living in high-flood areas."
The bill was supposed to deal with the "insolvency" of the National Flood Insurance Program by requiring the premiums to reflect real flood risks.
The result was a 10 fold increase in premiums.
At present, $527 billion worth of property is in the coastal floodplain.
The federal government heavily underwrites the flood insurance rates for these areas. The law "ordered FEMA to stop subsidizing flood insurance for second homes and businesses, and for properties that had been swamped multiple times."
These changes were to occur gradually over the course of five years. FEMA was also instructed to do a study on the affordability of this process, a study which it has failed to complete.
Provisions of the bill
The bill would delay the flood insurance premium increases mandated under the Biggert–Waters Flood Insurance Reform Act of 2012 for four years.
During that time, the
Federal Emergency Management Agency
The Federal Emergency Management Agency (FEMA) is an agency of the United States Department of Homeland Security (DHS), initially created under President Jimmy Carter by Presidential Reorganization Plan No. 3 of 1978 and implemented by two Exec ...
is supposed to come up with a plan to make the premiums cheaper and reassess its maps of areas that are likely to flood (and therefore require flood insurance).
In addition to delaying the onset of higher premiums, the bill would allow homeowners who sell their homes to pass the lower flood insurance premiums on to the next homeowner.
Procedural history
The Homeowner Flood Insurance Affordability Act of 2014 was introduced into the
United States Senate
The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States.
The composition and pow ...
on January 14, 2014 by
Sen. Robert Menendez (D, NJ).
Senator
Johnny Isakson
John Hardy Isakson (December 28, 1944 – December 19, 2021) was an American businessman and politician who served as a United States senator from Georgia from 2005 to 2019 as a member of the Republican Party. He represented in the United State ...
(R-GA) was the main Republican co-sponsor of the bill.
The bill was debated and considered on January 27, 28, and 29th, 2014.
On January 30, 2014, the Senate voted i
Roll Call Vote 19to pass the bill 67–32.
The White House originally released a statement opposing the bill, but changed its mind and supported the bill.
Speaker of the House
John Boehner
John Andrew Boehner ( ; born , 1949) is an American retired politician who served as the 53rd speaker of the United States House of Representatives from 2011 to 2015. A member of the Republican Party, he served 13 terms as the U.S. represe ...
indicated that that House might consider the Senate bill.
Debate and discussion
Supporters of the bill argue that the delay is necessary for economic reasons.
They argue that without the delay, flood insurance premiums will increase so much that many of the home and business owners they apply to will be unable to afford coverage and have to leave.
Constituents who use the program or are afraid they will be drawn into a floodplain have called their congresspersons to lobby for this bill.
Opponents object to the delay because the
National Flood Insurance Program
The National Flood Insurance Program (NFIP) is a program created by the Congress of the United States in 1968 through the National Flood Insurance Act of 1968 (P.L. 90-448). The NFIP has two purposes: to share the risk of flood losses through floo ...
is already $24 billion in debt and this change would hurt needed reforms to this program.
Opponents of undoing the insurance reforms are described as including budget hawks, insurance companies, scientists, and environmentalists.
Alternative proposals
Senator
Pat Toomey
Patrick Joseph Toomey Jr. (born November 17, 1961) is an American businessman and politician serving as the junior United States senator for Pennsylvania since 2011. A member of the Republican Party, he served three terms as the U.S. representat ...
(R-PA) offered an amendment that would have set up a graduated phase in of a maximum increase of 25% per year.
The goal of the amendment was to give people time to change their plans by moving, saving more money, getting errors related to floodplain maps worked out, and so forth. However, the amendment failed 34–65.
Frank Nutter
Frank or Franks may refer to:
People
* Frank (given name)
* Frank (surname)
* Franks (surname)
* Franks, a medieval Germanic people
* Frank, a term in the Muslim world for all western Europeans, particularly during the Crusades - see Farang
Curre ...
, the president of the
Reinsurance Associate of America
Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...
, suggested pursuing a plan of keeping the scheduled insurance premium increases, but targeting the homeowners that are "most in need, while maintaining the benefits of risk-based rates and incentivizing community and individual mitigation."
Howard Kunreuther
Howard Charles Kunreuther (November 14, 1938 – August 1, 2023) was an American economist. He was the James G. Dinan professor emeritus of decision sciences and public policy at the Wharton School of the University of Pennsylvania.
Background
H ...
favored of keeping the Biggert–Waters reforms.
He and his colleagues suggest using a voucher system instead that would help needy people in exchange for them taking action to make their homes safer and less prone to flood damage.
Their proposed reforms are explained in the working pape
Addressing Affordability in the National Flood Insurance Program
See also
*
List of bills in the 113th United States Congress
The bills of the 113th United States Congress list includes proposed federal laws that were introduced in the 113th United States Congress. This Congress lasted from January 3, 2013, to January 3, 2015.
The United States Congress is the bicamer ...
*
National Flood Insurance Program
The National Flood Insurance Program (NFIP) is a program created by the Congress of the United States in 1968 through the National Flood Insurance Act of 1968 (P.L. 90-448). The NFIP has two purposes: to share the risk of flood losses through floo ...
*
Homeowner Flood Insurance Affordability Act of 2013 (H.R. 3370; 113th Congress)
Notes/References
External links
Library of Congress – Thomas S. 1926beta.congress.gov S. 1926GovTrack.us S. 1926*
{{DEFAULTSORT:Homeowner Flood Insurance Affordability Act of 2014
Proposed legislation of the 113th United States Congress
Disaster preparedness in the United States
Flood insurance
Flood control acts in the United States