Last week, the House of Representatives voted 263-146 to approve the Flood Insurance Reform and Modernization Act of 2007 (H.R. 3121), which, among other things, would allow homeowners to purchase windstorm coverage from the National Flood Insurance Program (“NFIP”). The vote, split mostly along party lines, came despite warnings from the Bush Administration that it would veto the bill in its current form. The Administration opposes the bill, because it calculates that the current program is over $17 billion in debt and the addition of windstorm coverage could increase the program’s exposure to $1 trillion, a result that it called “fiscally irresponsible.”
Other changes to the NFIP include: updating the maximum coverage limits for residential and non-residential properties; requiring FEMA to review and update flood maps; phasing out subsidies on commercial properties, vacation and second homes built before 1974; and new required disclosures to consumers. For more background on the bill, see our earlier posts here, here, and here.
The Senate has yet to consider any form of the bill. We will continue to monitor NFIP-related developments and provide updates at InsureReinsure.com.
