Insurance commissioner Teresa Miller lauded the U.S. House of Representatives for its unanimous passage of the Flood Insurance Market Parity and Modernization Act, H.R. 2901, as a major step toward helping homeowners facing rising flood insurance premiums.
This legislation encourages more private insurers to write flood insurance and fits with current efforts by the Wolf Administration to increase consumer protection by raising awareness about growing options in the private flood insurance market that could result in substantial savings for many Pennsylvania homeowners.
"This proposal ties in perfectly with Gov. Wolf’s consumer protection agenda, and with work the Insurance Department has been doing the past several months, by creating a one-stop shop for homeowners to get information on flood insurance, including the increasing availability of private market coverage, which can often be substantially less costly than the National Flood Insurance Program policies managed by the federal government," Commissioner Miller said.
Mortgages backed by the federal government require flood insurance for homes in designated flood zones. Prior to the last three years, almost all residential flood insurance was sold through the federal government run National Flood Insurance Program (NFIP).
Recent premium increases for many homeowners with NFIP policies, and re-mapping of many other properties into flood zones by the Federal Emergency Management Agency, has made the flood insurance market more attractive to private insurers.
The legislation approved by the House committee would define as acceptable a policy issued by a private insurance company that is licensed, admitted, or otherwise approved in the state in which the insured property is located.
A policy issued by a non-admitted insurer, also known as a surplus lines policy, would also qualify. Including surplus lines policies is important, as most private coverage now sold in Pennsylvania is through the surplus lines market.
Commissioner Miller testified in favor of this legislation before the House Subcommittee on Housing and Insurance in January.
"During my testimony, I stressed that one of the obstacles to increasing the availability of private flood insurance is that many lenders are unsure if private coverage meets the requirements of the federal government.
"The Flood Insurance Market Parity and Modernization Act would remove that obstacle by requiring lenders to accept private flood insurance if it complies with state laws and regulations and includes the required limits of coverage," Commissioner Miller said.
She urged the U.S. Senate to follow the House and pass this important consumer protection bill.