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Study of Voluntary Community-Based Flood Insurance Options

Floor Speech

By:
Date:
Location: Washington, DC

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Ms. MOORE. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I want to start out by expressing my deepest appreciation to the manager of this bill, Representative Biggert, and also a cosponsor of this legislation, in addition to Representative Bachus and Representative Waters, a bipartisan initiative.

As Mrs. Biggert has indicated, this study was originally included in the flood insurance bill that passed the House but was later dropped for reasons of expediency. It was not controversial in negotiations with the Senate. I believe that a community-based flood insurance option may eventually provide a wonderful cost-saving option for communities within the framework of the overall National Flood Insurance Program.

The potential for savings and community empowerment certainly merits a study. H.R. 6186 would require FEMA to study voluntary community-based flood insurance options and examine how such options could be incorporated into the National Flood Insurance Program.

The idea is to study group flood insurance policies for a National Flood Insurance Program-participating community or a FEMA-designated flood plain so that everyone in the community would pay the same rate. Now, this approach has merit because it means not only potentially lower rates due to increased participation, but there is also the option of providing lower-income households with access to vouchers to purchase flood insurance as part of the group.

The group rating, of course, would spread the risk to an affordable extent for each individual homeowner. An analogy for this concept is group or employee health insurance coverage versus individual coverage. We all understand that group coverage is less expensive than individual coverage due to the economies of scale of streamlined underwriting. The difference is, in this case, a community, not an individual, would be the policy holder.

Now, this brings me to a very important potential benefit of this approach: increased incentives for communities to take affirmative actions to mitigate the threat from floods in the community. Now, while an individual flood insurance holder has absolutely no incentive or means to, say, build stronger levees or dikes, a community policyholder would have the means and incentives to take those kinds of precautions. In theory, under this model, the homeowner would pay insurance like a utility bill on a monthly or quarterly basis.

Finally, I want to point out that there is precedent for this idea. Under current regulations, FEMA could issue group flood insurance policies. The program was limited, but it was successful. This bill only adds that FEMA examine the cost and benefits of using this approach on an ongoing basis as an option for communities.

I urge all my House colleagues to support this legislation, and I yield back the balance of my time.

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