Congress to consider privatizing the NFIP
Rep. Hensarling’s pledge drew praise from the free market-oriented R Street Project, which holds that flood is an insurable risk and should thus be left to the private market. Ray Lehmann, senior fellow at the Washington-based nonprofit, also noted that while privatization could lead to higher costs, it also could mean broader coverage.
“There’s no doubt rates would have to rise above what the flood insurance program charges,” said Mr. Lehmann. “But the other side is that the flood insurance program is not all that generous; it doesn’t even offer business interruption. Having it be a private program, you could go to your traditional primary carrier and have a robust package put together that integrates all of the terms from dollar one.”
He said privatization would require “a good deal of discussion and thought and it would take time to both craft the legislation and provide for a transition to a private market.”
