Homeowners forced to buy expensive flood insurance through the federal government could have more buying power if a pair of proposals make it through the U.S. House and Senate.
Ron Ruman, Pennsylvania Insurance Department spokesman, said his office would like to see private insurance on a level-playing field with the federal government’s flood insurance offerings.
“We believe that by doing this it will bring much more competition into the market and we believe we’re providing homeowners with many more options and lower premiums, perhaps significantly lower premiums in many cases,” he said.
The state supports an estimated 86,000 miles of creeks, streams and rivers, requiring more than 34,000 people to purchase flood insurance. More than half that number have filed claims since 2006, Ruman said.
Under current law, the Biggert-Waters Flood Insurance Reform Act of 2012, only policies purchased through the National Flood Insurance Program are considered sufficient to fulfill mandatory purchase requirements.
The insurance commissioner’s office supports clarifications included in House Resolution 2901 and Senate Bill 1679 that would open the market to private insurers, whose policies would then be recognized by mortgage lenders.
Policy owners statewide have watched their premiums increase, Ruman said, especially as the federal government remapped flood plains across the country.
“There is some private insurance out there for flood coverage, and in many cases, it is significantly less expensive than what the federal government offers," he said. "The problem is that the law passed in 2012 by Congress did not define the mandatory purchase requirements for private flood insurance to make it equivalent to what the federal government offers.”
Both have been stalled in committee since June 25.
