House Backs Flood Insurance Overhaul
The House overwhelmingly passed a bill last week to reform the National Flood Insurance Program by phasing out billions of dollars of subsidies and beefing up enforcement of mandatory coverage in flood areas.
The bill would eliminate subsidies for vacation homes and non-residential properties to bring the annual premiums for those properties more in line with market rates.
It would also raise lender fines for non-enforcement of mandatory flood insurance from the current $350 to $2,000 per incident, and as much as $1 million for a single lender.
The measure would also increase maximum coverage for residences and contents from $350,000 to $470,000; and for businesses and churches from $500,000 to $600,000.
The main goal of the legislation, which must now be reconciled with a separate bill in the Senate, is to dig the program, administered by the Federal Emergency Management Agency, out of a deep financial deficit, estimated at as much as $20 billion.
That's after Congress voted to increase funding for the flood program from $1.5 billion to $21 billion after hurricanes Katrina, Rita, and Wilma.
Among the other things the House bill would do are require FEMA to draw new flood maps and increase living expenses paid to premium holders who have been flooded out of their homes.
Congress has also appropriated almost $10 billion to compensate homeowners in the hurricane-stricken areas who did not have flood insurance. The unprecedented government bailout will provide up to $150,000 each to homeowners in Louisiana and Mississippi who did not buy federal insurance.