New Rule Could Boost Private Flood
A new federal rule being finalized could increase the number of flood insurance policies underwritten by private companies.
The new rule requires mortgage lenders to accept private flood insurance as an alternative to insurance backed by the federal government. Private flood insurance now accounts for less than 5 percent of the residential market, and most private flood insurance policies cover commercial properties or residential properties that need coverage above the $250,000 limit on National Flood Insurance Program (NFIP) policies.
Treasury and the FDIC have already indicated their approval of the rule. If it is additionally approved by the Federal Reserve, the Farm Credit Administration, and the NCUA, the final rule will become effective on July 1, 2019. The promulgation of the rule is required by a provision in the Biggert-Waters Act of 2012, which reauthorized and reformed the NFIP.
PIA National thanks these agencies for their years of hard work on the complex issue of private flood insurance and will continue to support efforts to increase the choices available to flood insurance consumers. PIA National also supports the long-term reauthorization of the NFIP by Congress, because the private flood market presently lacks the capacity and availability to fully supplant it.