House Votes to Bolster Flood Insurance
More people in flood-prone areas would have to purchase flood insurance under a bill passed Tuesday by the House that is aimed at rescuing the National Flood Insurance Program from insolvency.
The legislation, approved by a 335-60 vote, requires that all mortgage lenders make sure that borrowers in flood-hazard communities purchase federal flood insurance as a condition of their loan.
It also provides up to $65 million a year to reinforce or relocate structures in flood-prone areas and to acquire frequently flooded land for public use. Another section sets up a study on the economic impact of coastal erosion.
The current program, run by the Federal Emergency Management Agency, is “technically insolvent,” said Rep. Joseph Kennedy (D-Mass.), chairman of the Banking, Finance and Urban Affairs Committee panel on consumer credit and insurance. “This is a program that is crying out for reform.”
The program, established in 1968, is a perennial money loser because only about 17% of the estimated 10 million residential properties in flood-hazard areas are insured.
Kennedy said that billions of dollars paid out in disaster relief after last year’s Midwest floods could have been saved if more people had been insured.
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