House Transportation and Infrastructure Committee Issues Testimony by Harford Mutual Insurance
Introduction
"Chairman Barletta, Ranking Member Johnson, and members of the Subcommittee, thank you for inviting me to testify at today's important hearing. My name is
The Coalition, formed in 2011 to respond to an increasing number of severe disasters, is made up of firefighters, emergency responders, insurers, engineers, architects, contractors and manufacturers, as well as consumer organizations, code specialists, and many others committed to building the nation's homes and businesses more resiliently.
Founded in 1842 in
This focus on policyholders is evident in our commitment to individualized customer service, fast, fair claims handling, and the creation of innovative products designed to meet our customers' changing needs. Growing from a small local insurer serving homeowners and farmers in rural
Harford Mutual is a member of the
The insurance industry plays a unique and critical role in the disaster mitigation and recovery process, serving as a leader in promoting pre-disaster loss-prevention techniques, and standing shoulder to shoulder with the federal government and emergency responders to help victims recover and rebuild after a catastrophe. As we have seen in recent days, now is more important than ever to consider the devastating, and growing impact, of severe disasters. And during this critical time for the folks in
While progress has been made, serious concerns remain surrounding the federal government's current approach to pre-disaster mitigation, which has left communities across the nation vulnerable ahead of the next storm. In the face of an unsustainable, and fast-rising post-disaster federal cost share, Harford Mutual, NAMIC, and the
Disasters Have Long-Term Devastating Effects on Local Economies and Communities
As victims recover from the massive destruction left behind in the wake of Hurricanes Harvey and Irma, we should remember that the storm has not only destroyed lives and homes, but will have a devastating effect on local economies for years to come. According to
Natural catastrophes are not only wreaking havoc on our economies, they are increasing in frequency and severity at an alarming rate. Between 1976 and 1995, there were an average number of 39 yearly federal disaster declarations.5 This number skyrocketed to 121 between 1996 and 2015, during which we experienced Hurricane Katrina and Superstorm Sandy, storms that combined to kill over 2,000 people and cause
A Backwards Approach to Mitigation
Even knowing the power of resilient building and despite multiple studies that show that every
But a larger issue is at play. From 2004 to 2013,
Leaving Communities and Individuals Vulnerable to the Next Storm
The increasing reliance on taxpayers to cover post-disaster losses has created a moral hazard, where the vast majority of the nation is stuck in an endless cycle of destruction, rebuilding homes and businesses following disasters to the same subpar standards that enabled their destruction. And because of the dangerous assumption that the federal government has a never-ending supply of cash to cover the cost of post-disaster recovery, individuals are not adequately protecting themselves.
This is evident right now in
Correcting Course Through a National Mitigation Investment Strategy Preventative reforms will help save lives, dramatically reduce damage, and reduce the cost of recovery for taxpayers. Unfortunately, the federal disaster system is fragmented and heavily skewed towards reactive post-disaster mitigation spending rather than thoughtful long-term investing.
1. Incentivize States to Build Resiliently
First, since the federal government is failing to incentivize states, communities, and individuals to invest in pre-disaster mitigation, leaving so many communities stuck in an endless cycle of destruction, we are calling on
2. Fortify Communities with New Tools for Mitigation
We must leverage the lifesaving and cost saving power of pre-disaster mitigation by shifting significant federal resources from being employed in a reactive, post-disaster setting, to being invested ahead of the disaster. This can be accomplished by first clarifying that the development and enforcement of state building codes are eligible uses under the existing Pre-Disaster Mitigation Program, and then shifting current misallocated resources into a National Hazard Mitigation Grant Program (NHMGP). The NHMGP will allocate funds for the development, implementation, or enforcement of modern building codes and other cost-effective mitigation purposes. As part of this important reform, 10 percent of all funds appropriated for the existing, post-disaster Hazard Mitigation Grant Program would be allocated to the new NHMGP, where funds will be available without regard to whether a disaster occurred, and can be used towards strengthening the nation's homes and businesses.
3. Equip States with New Tools to Enforce Resiliency
Many states that have adopted strong building codes don't operate an adequate inspection regime, and so we are calling for
4. Reform the Federal Cost-Share
Given the unsustainable, and fast-rising post-disaster federal cost share, action must be taken to protect our states and communities, while reducing the dependence on taxpayers. We can achieve this measurable reform by adjusting the federal minimum cost share following a major disaster based upon adoption of
5. Streamline FEMA Assistance Programs
Increasingly, victims of disasters are going without assistance after a storm since assistance is distributed by 19 federal agencies, that frequently tie the funds to projects around the nation. We are calling for the federal government to more efficiently respond to victims after a disaster by consolidating ad-hoc federal disaster assistance programs under
Conclusion
Chairman Barletta, Ranking Member Johnson, and members of the subcommittee, thank you again for holding today's hearing on this important topic. It is more critical than ever that we ensure our nation's homes and businesses are built resiliently to withstand the devastating impacts of catastrophes. As
Footnotes:
1 https://www.fema.gov/media-library/assets/documents/108451.
3
4 Id.
5 https://www.fema.gov/disasters/grid/year.
6 Id.
7 NATIONAL INSTITUTE OF BUILDING SCIENCES (2005) NATURAL HAZARD MITIGATION SAVES: AN INDEPENDENT STUDY TO ASSESS THE FUTURE SAVINGS FROM MITIGATION ACTIVITIES. VOL. 1.
8
9
10 The additional 4 percent in funding would be allocated to states through
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