• Home
  • About Us
    • Our History & Accomplishments
    • Our Leader
    • LMA Gives
    • Photo Gallery
    • Library & Resources
  • Services
    • Assignment of Benefits & Insurance Litigation
    • Associations & Nonprofits
    • Business Development & Procurement
    • Education
    • Energy & Environment
    • Emergency Management
    • Flood Insurance & Resilience
    • Healthcare
    • Insurance/Financial Services
    • Legislative & Regulatory Monitoring
    • Marketing Intelligence
    • Property & Casualty Insurance
    • Public Relations
  • News / Podcasts / Library
  • Contact
  • Home
  • About Us
    • Our History & Accomplishments
    • Our Leader
    • LMA Gives
    • Photo Gallery
    • Library & Resources
  • Services
    • Assignment of Benefits & Insurance Litigation
    • Associations & Nonprofits
    • Business Development & Procurement
    • Education
    • Energy & Environment
    • Emergency Management
    • Flood Insurance & Resilience
    • Healthcare
    • Insurance/Financial Services
    • Legislative & Regulatory Monitoring
    • Marketing Intelligence
    • Property & Casualty Insurance
    • Public Relations
  • News / Podcasts / Library
  • Contact
  • MENU

Refusing Federal Flood Insurance

SHARE THIS

Just one of FEMA’s bold proposals

FEMA is proposing what many are describing as the most dramatic changes in the 54-year history of its National Flood Insurance Program (NFIP).  It recently submitted a long-term reauthorization proposal to Congress that tries to strike a balance between providing needed federal flood insurance to a growing number of Americans at risk and stemming the flow of red ink from subsidized rates and policies that has created a $20.5 billion debt.

The 104-page proposal would:

  • Prevent NFIP from insuring newly built homes in flood-prone areas
  • Drop coverage for homeowners with repeated claims
  • Create a national disclosure law of flood history for property that’s for sale or rent
  • Stop writing commercial policies

Floridians are the largest customers of the NFIP, with 1.7 million of its 5 million polices, most of them in South Florida.  These proposed changes go well-beyond its recently-implemented Risk Rating 2.0, a new pricing methodology to more accurately price rate to individual property risk.

FEMA said in its proposal that ending NFIP coverage for new homes in coastal and other flood-prone areas would create “an inventory of new flood risk properties that private property insurance companies could compete for in a marketplace without a subsidized government program.”  Also significant is its proposed approach to “repetitive loss properties” (RLP), which represent only 1% of its policies but consumer 30% of claims payments.  FEMA would cancel coverage on properties that receive four claims payments of at least $10,000 each.  Florida is among the five states with the most RLPs, with 15,000 of the 150,000 such properties nationwide.

FEMA’s proposal, which includes a request to cancel its debt, was sent earlier this month to congressional leaders who would have to approve each part of it.  It met with mixed reviews by the Senate Banking Committee on June 16.  Senator Bob Menendez (D-NJ) was quoted before the meeting as saying the idea of refusing new polices in flood areas “runs completely counterintuitive to the goals of the program.”  But Senator Pat Toomey (R-PA) said “We should not provide flood insurance subsidies that encourage people to live in a flood-prone area.”

The NFIP is operating under a short-term reauthorization (its 21st in the past five years) which expires September 30.  It’s considered likely that another long-term reauthorization, along with the rest of FEMA’s proposal, will have to wait for the new Congress seated after the November election.  For more information on these topics, visit our Flood Insurance & Resilience webpage.  

LMA Newsletter of 6-27-22

SHARE THIS

Tags: Bob Menendez, Federal Flood Insurance, FEMA, National Flood Insurance Program, NFIP Reauthorization, Pat Toomey, Repetitive Loss Properties, Risk Rating 2.0

“Great article on Risk Rating 2.0!”

Austin Perez, Senior Policy Representative for Federal Housing, Valuation, Insurance and Commercial Issues
National Association of Realtors
Washington, D.C.

“Just a quick note to let you know how much I have appreciated your newsletter over the years and the assistance they offer for those in the field of claims. We depend on the information more than you will ever know!”

Laurie Rasberry, Chief Claims Officer
Acorn Claims
Prosper, Texas

“Just wanted to say that I thoroughly love your newsletter. It’s is always informative and insightful to the ins and outs of our industry.  You are an inspiration and an important asset in the insurance world.  Keep up the great work!” 

Cynthia Scott, President
University Insurance Group
Davie, FL

“Lisa this is another great newsletter, and we appreciate the time and energy you put into these informative updates – you are on top of these topics!”

Mike Graham, CEO
Smart Vent Products, Floodproofing.com, & Risk Reduction Plus
Juno Beach, FL

“Your newsletter is fabulous!  I greatly appreciate the topics you expose, so that insurance professionals like myself can keep up with the latest events that affect the public we serve and ourselves.”

Cynthia Hoehn, Independent Property & Casualty Personal Lines insurance agent
Clermont, FL

“Thank you Lisa for staying on top of, as well as advocating, for Florida residents and legislative reform. Your newsletters are very informative and enjoy reading the points of view.”  

Shawna Miller, Sr. Claims Quality Assurance & Compliance Manager
Florida Peninsula Insurance Company
Jacksonville, FL

“Another great Newsletter on Florida industry this week.  Your service and advocacy in Florida is very important to keeping me updated and apprised of the Florida insurance laws, trends and overall environment.  Something similar is very much needed in Louisiana, too.”

Jennifer Tedesco, Esq., Claims Director
Pharos Claims Services
Orlando, FL

“I have followed your weekly newsletter and podcasts and now have a full appreciation for what you bring to this industry.  You are an inspiring force, plain and simple.  I wanted you to know that you make a difference.  Thank you for all you do!”

Jeffrey Karam, CPCU
Bradenton, FL

“Lisa Miller is a true champion for the insurance industry, with her regular updates! We appreciate all you do and keeping us up to date on priority issues!”

Gillian Lloyd, Account Executive
Zywave
Milwaukee, WI

GET THE LATEST UPDATES IN YOUR INBOX FOR FREE!

SUBSCRIBE NOW

READ THE LATEST LMA NEWSLETTER ONLINE NOW

READ NOW

331 N. Monroe Street
Tallahassee, FL 32301
(850) 222-1041
[email protected]

*DBE certified through affiliate Lisa Miller Consultants

© Copyright 2008 - 2023
Lisa Miller Associates
All Rights Reserved
Managed by SiteBolts