House Backs Flood InsuranceOverhaul

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WASHINGTON - (06/28/06) – The House overwhelmingly passeda bill Tuesday to reform the National Flood Insurance Program byphasing out billions of dollars of subsidies and beefing upenforcement of mandatory coverage in flood areas. The bill wouldeliminate subsidies for vacation homes and non-residentialproperties to bring the annual premiums for those properties morein line with market rates. It would also raise lender fines fornon-enforcement of mandatory flood insurance from the current $350to $2,000 per incident, and as much as $1 million for a singlelender. The measure would also increase maximum coverage forresidences and contents from $350,000 to $470,000; and forbusinesses and churches from $500,000 to $600,000. The main goal ofthe legislation, which must now be reconciled with a separate billin the Senate, is to dig the program, administered by the FederalEmergency Management Agency, out of a deep financial deficit,estimated at as much as $20 billion. That’s after Congressvoted to increase funding for the flood program from $1.5 billionto $21 billion after hurricanes Katrina, Rita, andWilma.

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