Rep. Wild Calls for Stronger Consumer Affordability Protections in National Flood Insurance Program

Today, Representative Susan Wild (PA-07) wrote to leadership in the House Financial Services Committee to demand stronger consumer affordability protections in the National Flood Insurance Program (NFIP), which is set to be reauthorized later this year. 

“Floods are the most common natural disaster in the United States and the NFIP provides flood insurance protection for over 5 million Americans across the country,” wrote Rep. Wild. “On top of premiums rising due to the increase of flooding in recent years, Risk Rating 2.0 has the potential to increase premiums for many if not most homeowners. Under current law, NFIP premiums can increase as much as 18% per year for homeowners’ primary residences and 25% for small businesses. Large premium increases have the potential to force many policy holders to abandon their policies, lapse into late payment status, or even lose their homes. I strongly urge you to cap rate increases on annual flood insurance premiums at no more than 9% in the NFIP reauthorization bill.”

Flood insurance is particularly important for Pennsylvania residents given the propensity for areas of the commonwealth to experience flash flooding, and standard homeowners’ and renters’ insurance rarely covers flooding or related damage. 

The NFIP, which is run through the Federal Emergency Management Agency (FEMA), will be changing the way in which flood insurance premiums are calculated under a new initiative called Risk Rating 2.0. The new premiums will reflect an individual property’s flood risk and will take effect for new policies in October 2021 and for existing policyholders in April 2022.

In the letter, Rep. Wild also insisted upon robust homeowner outreach and education about Risk Rating 2.0 and the reauthorization of the National Flood Insurance Program. 

The NFIP was last reauthorized in 2012 for a five-year period and has been funded through short-term measures since 2017. It is set to expire in September of this year. 

The full text of the letter is available here.