The House has unanimously passed a bill (HR 3959) to end premium subsidies for the costliest homes insured by the National Flood Insurance Program (NFIP).  The legislation applies to primary residences built before 1974, when flood insurance rate maps went into effect and homes already in flood zones began receiving subsidies. People who buy the older single-family houses for at least $600,000 would see flood insurance costs rise to market-based rates. The new rates would be phased in starting in 2011.

H.R. 3959 is a stand-alone bill that works in tandem with H.R. 3121, the Flood Insurance Reform and Modernization Act that was passed in September 2007 in the House. H.R. 3121 also phases out the NFIP's premium subsidies for commercial properties and second homes. A similar bill cleared the Senate Banking Committee in October. The House bill, unlike the Senate measure, also would permit the flood program to sell optional windstorm coverage to homeowners and businesses. PIA opposes the provision adding windstorm coverage to NFIP policies. The statutory language authorizing the NFIP expires at the end of 2008.

January 29, 2008