Dear Chairman Crapo and Ranking Member Brown:
SmarterSafer—a broad-based coalition of conservation groups, taxpayer advocates, insurance interests, and housing and mitigation organizations—understands that the Banking Committee will soon act on flood insurance reauthorization and reform. SmarterSafer urges the committee to make meaningful reforms to the program to ensure it is financially stable in the long term. To do this, we urge the committee to include the following in any reauthorization package:
Consumer choice – Any reform bill must include clarification of current law that homeowners can satisfy mandatory-purchase requirements with private flood policies. The coalition strongly urges the committee to include the Heller-Tester bill, the Flood Insurance Market Parity and Modernization Act, which is merely a clarification of current law, but is needed to assure lenders they can accept private policies. A version of this bill passed the House 419-0 last Congress, and just passed the House Financial Services Committee 58 to 0 last week. Homeowners in harm’s way should not be forced to purchase a National Flood Insurance Program policy if they can find a more affordable private policy, merely because of a lack of clarity.
Accurate mapping – The Federal Emergency Management Agency must be required to ensure mapping data have both greater engineering confidence and include property-level elevation information through Light Detection and Ranging surveying, a proven technique for developing high-resolution maps, to ensure FEMA’s flood maps accurately depict areas likely to flood. Without more accurate mapping, homeowners may be misled as to flood risk and burdened by having to prove their elevation through expensive elevation certificates and time consuming appeals with FEMA.
Mitigation investments – Any reform bill must include investments in mitigation so that the most at-risk properties have the ability to reduce their risk. The best way to reduce rates is by reducing risk. We urge the committee to include investments in mitigation, as well as a requirement that FEMA work with lenders and the Federal Housing Administration to facilitate mitigation loans. We also urge the committee to include requirements that communities plan for known flooding risks, and assess communitywide nature-based mitigation efforts that are cost-effective and will reduce future flooding.
Continued move to solvency – Any reform bill must continue to move the program to fiscal soundness by gradually phasing properties to risk-based rates. For too long, the federal government has masked risk through subsidized rates, and this has resulted in a program deeply in debt to taxpayers. The committee should continue a gradual move to risk-based rates, and should include assistance outside of the rate structure for low-income homeowners who cannot afford their full risk-based rates. To ensure solvency, FEMA should continue to use reserve funds to manage and reduce risk.
SmarterSafer’s full flood insurance reform proposal can be found at http://www.smartersafer.org/wp-content/uploads/SmarterSafer-NFIP-Policy-Proposal_February- 2017.pdf. We look forward to working with Congress as it looks to reauthorize and reform the National Flood Insurance Program (NFIP).
Image by Robert Kneschke