WASHINGTON (May, 2016) — Property owners who opt to purchase flood insurance in the private market rather than through the National Flood Insurance Program may do so under current rules, but they risk paying higher rates if they return to the NFIP. H.R. 2901, the "Flood Insurance Market Parity and Modernization Act," passed the U.S. House of Representatives today by a vote of 419-0 and seeks to alleviate that concern.
The National Association of Realtors® stands firmly behind the effort.
"Realtors® know that a robust National Flood Insurance Program is important for protecting consumers and ensuring property sales can move forward in 20,000 communities nationwide," said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. "For many, the NFIP offers the only source of coverage that meets federally-related mortgage requirements and protects properties in the 100 year floodplain.
"At the same time, consumers who wish to purchase insurance in the private market should have the freedom to do so," he said. "This legislation will help foster a vibrant private flood insurance market while giving consumers the flexibility to return to the NFIP at a reasonable cost if they choose to."
Under current regulations, the NFIP requires homeowners to retain a minimum amount of flood insurance coverage to maintain the lowest rates available within the NFIP. Those same regulations treat consumers who move to private insurance as having had a "break" in coverage, even if the private insurance product offers comparable coverage for the property.