A bill which would provide flexibility for consumers to buy flood insurance from either a government-backed or private source received a 419-0 approval vote in the U.S. House on Thursday.
Consumers have the option to obtain insurance through the National Flood Insurance Program (NFIP), a fund which was created in 1968. They also can get the flood insurance on the private market, but that led to a problem for those who wanted to switch back to the government-backed program.
As NAR explains:
Under current regulations, the NFIP requires homeowners to retain a minimum amount of flood insurance coverage to maintain the lowest rates available within the NFIP. Those same regulations treat consumers who move to private insurance as having had a “break” in coverage, even if the private insurance product offers comparable coverage for the property.
In those cases, homeowners sometimes often faced a steep increase in rates.
H.R. 2901 would change this by clarifying that private flood insurance that meets state law provides continuous coverage. If the bill becomes law, property owners could move seamlessly between the NFIP and private insurance markets without the risk of arbitrary rate increases.