Today, U.S. Reps. Kathy Castor (FL14) and Blaine Luetkemeyer (MO03) reintroduced H.R. 4699, the Continuous Coverage for Flood Insurance Act, which would stop the Federal Emergency Management Agency (FEMA) from penalizing consumers who elect to exercise their right to maintain flood insurance outside of the National Flood Insurance Program (NFIP).

“Families, homeowners, and small business owners across Florida deserve financial stability, peace of mind and less confusion when it comes to flood insurance," said Rep. Castor. "This bipartisan legislation is an important step towards providing consumers an alternative to the National Flood Insurance Program without penalty. Competition can bring lower prices and broaden the insurance pool to help reduce flood insurance rates that threaten hardworking families and small businesses. As we look towards another active hurricane season, I’m glad to work with my colleague Representative Luetkemeyer to ease cost burdens on hardworking Americans and increase consumer choice in continuous flood insurance coverage.”

“American consumers should have the right to decide what flood insurance policy best fits their specific needs, whether it be an NFIP or private sector policy. Penalizing policyholders who have maintained continuous flood coverage just because they explored options in the private market is nonsensical and only deters families from finding more affordable options,” said Rep. Luetkemeyer.

In 2012, Congress enacted the Biggert-Waters Flood Insurance Reform Act to reform the NFIP. Among other reforms, the Biggert-Waters Act required federal lending institutions to accept certain non-NFIP insurance policies, reinforcing the fact that other non-NFIP insurance policies can be used to satisfy the NFIP’s mandatory purchase requirement. As a result of this law, in February 2019, a final rule was issued regarding the acceptance of non-NFIP insurance which took effect on July 1, 2019.

Many consumers are unable to take advantage of these potentially beneficial and cost-effective non-NFIP insurance policies. Currently, the NFIP requires continuous coverage to be eligible for grandfathered rates, but only counts the time in an NFIP policy. If a policyholder chooses to leave the program and return later, the NFIP will charge the full, non-grandfathered rate – even if the policyholder decides to obtain a non-NFIP insurance policy sanctioned by the new rule. The prospect of higher insurance rates is not only a deterrent to the marketplace but also a barrier to more affordable flood insurance.

Supporting organizations include: National Association of Realtors, American Bankers Association, American Property Casualty Insurance Association, Assurant, Council of Insurance Agents & Brokers, Independent Community Bank Association, Independent Insurance Agents & Brokers of America, Poulton Associates, Reinsurance Association of America, Selective Insurance, Wholesale & Specialty Insurance Association and Wright Flood.

Supporting quotes for the legislation can be found here.