Rep. Wild Calls for Stronger Consumer Affordability Protections in National Flood Insurance Program

WASHINGTON, June 25 -- Rep. Susan Wild, D-Pennsylvania, issued the following news release on June 24, 2021:

Representative Susan Wild (PA-07) wrote to leadership in the House Financial Services Committee to demand stronger consumer affordability protections in the National Flood Insurance Program (NFIP), which is set to be reauthorized later this year.

"Floods are the most common natural disaster in the United States and the NFIP provides flood insurance protection for over 5 million Americans across the country," wrote Rep. Wild. "On top of premiums rising due to the increase of flooding in recent years, Risk Rating 2.0 has the potential to increase premiums for many if not most homeowners. Under current law, NFIP premiums can increase as much as 18% per year for homeowners' primary residences and 25% for small businesses. Large premium increases have the potential to force many policy holders to abandon their policies, lapse into late payment status, or even lose their homes. I strongly urge you to cap rate increases on annual flood insurance premiums at no more than 9% in the NFIP reauthorization bill."

Flood insurance is particularly important for Pennsylvania residents given the propensity for areas of the commonwealth to experience flash flooding, and standard homeowners' and renters' insurance rarely covers flooding or related damage.

The NFIP, which is run through the Federal Emergency Management Agency (FEMA), will be changing the way in which flood insurance premiums are calculated under a new initiative called Risk Rating 2.0. The new premiums will reflect an individual property's flood risk and will take effect for new policies in October 2021 and for existing policyholders in April 2022.

In the letter, Rep. Wild also insisted upon robust homeowner outreach and education about Risk Rating 2.0 and the reauthorization of the National Flood Insurance Program.

The NFIP was last reauthorized in 2012 for a five-year period and has been funded through short-term measures since 2017. It is set to expire in September of this year.

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June 24, 2021

To: The Honorable Maxine Waters, Chairwoman, House Financial Services Committee, 2129 Rayburn House Office Building, Washington, DC 20515

The Honorable Patrick McHenry, Ranking Member, House Financial Services Committee, 4340 O'Neill House Office Building, Washington, DC 20024

Dear Chairwoman Waters and Ranking Member McHenry,

Thank you for your continued leadership in your work to reauthorize the National Flood Insurance Program (NFIP). I write today to urge you to support stronger consumer affordability protections for homeowners in the authorization bill as well as robust homeowner outreach, support, and education.

As you know, floods are the most common natural disaster in the United States and the NFIP provides flood insurance protection for over 5 million Americans across the country. My constituents rely on the NFIP to provide them with quality, affordable flood insurance to protect their homes from the impact of flooding. Now, the Federal Emergency Management Agency (FEMA), as part of their administration of the NFIP, is rolling out Risk Rating 2.0, a program of adjusting premiums to match each homeowners' individual property risk more closely. On top of premiums rising due to the increase of flooding in recent years, Risk Rating 2.0 has the potential to increase premiums for many if not most homeowners. Under current law, NFIP premiums can increase as much as 18% per year for homeowners' primary residences and 25% for small businesses. Large premium increases have the potential to force many policy holders to abandon their policies, lapse into late payment status, or even lose their homes. I strongly urge you to cap rate increases on annual flood insurance premiums at no more than 9% in the NFIP reauthorization bill.

Further, I urge that the NFIP reauthorization ensure that homeowners who will pay less in premiums under Risk Rating 2.0 automatically see the changes without having to claim this savings and deal with any red tape. In addition, I ask the committee to support funding and include language to provide for a robust homeowner outreach and education program in advance of the rollout of the Risk Rating 2.0 and the NFIP reauthorization. Homeowners must be able to easily gain meaningful information about the program, the changes to their own policies, any available cost savings available to them, and receive clarity about what is and is not covered under their policy.

Finally, I ask that you strongly consider examining the NFIP claims processes for areas that could be improved and made more efficient and consumer friendly. Flood insurance is essential to protecting the homes and livelihoods of many American families. Thank you for your time and consideration.

Sincerely,

Susan Wild

Member of Congress