Flood Insurance Reform Act Of 2011
I rise today in support of this bipartisan amendment that strikes a blow for fairness for those consumers who need flood insurance. I rise along with my colleagues from Florida: Representative Ileana Ros-Lehtinen, David Rivera, Ruben…
I rise today in support of this bipartisan amendment that strikes a blow for fairness for those consumers who need flood insurance. I rise along with my colleagues from Florida: Representative Ileana Ros-Lehtinen, David Rivera, Ruben Hinojosa, and Rush Holt.
I am a proud Floridian by birth. I make Florida my home. Most of my family and friends live in the great State of Florida. On top of our sunshine, Florida has a regular hurricane season and torrential rainfalls. The majority of the people who live in Florida live in this reality for the majority of their lives. However, flooding does not only affect the State of Florida, so I want to ensure that taxpayers who live in flood zones do not pay too much for their vitally needed flood insurance. This amendment is very simple:
It prevents flood insurance rates from potentially going up 100 percent. The current cap on flood insurance rate increases in a given year is 10 percent. My amendment would keep it that way. This commonsense, bipartisan amendment is fiscally responsible. It protects consumers, and it ensures that the National Flood Insurance Program will remain sound.
Mr. Chair, I rise today in support of my bipartisan amendment that strikes a blow for fairness for those consumers who need flood insurance. Along with my colleagues Reps. Ileana Ros-Lehtinen, David Rivera, Ruben Hinojosa, and Rush Holt, I want to ensure that taxpayers who live in flood zones do not pay too much for their vitally needed flood insurance. My amendment is very simple. It prevents flood insurance rates from going up 100%. The current cap on flood insurance rates is ten percent. My amendment would keep it that way.
I am a proud Floridian by birth. I make Florida my home. Most of my family and friends live in the great State of Florida. On top of our sunshine, Florida has a regular hurricane season and torrential rainfalls. The majority of the people who live in Florida live with this reality for the majority of their lives. However, flooding does not only affect the State of Florida. Flooding is our Nation's most common disaster. While flooding affects every State, most private insurance companies do not offer their own flood insurance. Plus, standard homeowner insurance policies do not cover flooding.
In 1968, Congress started the National Flood Insurance Program, or the NFIP. This allows homebuyers to purchase flood insurance for their homes. In Florida, you cannot get a mortgage on your property if you do not have a flood insurance policy on your home. Ninety percent of all flood insurance is done through the NFIP. There are more than 20,000 NFIP communities throughout our nation and all of them are not in Florida.
Since 1978, Florida policyholders have paid 14.1 billion dollars in premiums and have had 231,595 individual losses and received ONLY $3.6 billion in payments--3.9 times more in premiums than they receive in claims. Yet Floridians had a 9.6% increase in premium rates from 2009 to 2010. Nationally, from 2009 to 2010, premiums increased an average of 8%.
The NFIP today covers approximately 5.6 billion households and businesses across the country for a total of $1.25 trillion in exposure. Forty percent of those policies are held in Florida, and one in four Floridians is covered under NFIP. Floridians collectively pay nearly $900 million in premiums per year.
The near $19 billion in debts held by the NFIP are mostly as a result of the 2005 hurricane season (Hurricanes Katrina, Rita, and Wilma) and the 2008 Midwest floods. While the average flood insurance policy is about $600 per year, residents of high-risk flood areas pay disproportionately more in premiums. However, these residents do not take near the same proportion in payments on claims. Furthermore, individuals outside of high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding.
The NFIP paid $709 million in flood insurance claims to homeowners, business owners, and renters in 2010. In fact, in 2010, New Jersey had the highest number of claims, and Tennessee had the highest payments on claims--not Florida. As a matter of fact, Florida was not in the top 10 in either category of claims or payments.
I thank the Chair for the time. My commonsense amendment is fiscally responsible, protects consumers, and ensures that the NFIP will remain sound.