Inhofe Introduces Disaster Savings Accounts Bill

Press Release

U.S. Sen. Jim Inhofe (R-Okla.) today introduced the Disaster Savings Accounts (DSA) Act of 2014 in the Senate. The DSA Act would establish a new tax-preferred savings account that homeowners can use specifically for the purpose of natural disaster mitigation and recovery.

"Every year many Americans face unexpected financial tolls and personal losses from natural disasters, of which Oklahomans experienced some of the harshest last year when tornadoes devastated portions of our state," said Inhofe. "Whether it's a retirement or health savings account, Americans understand the importance of preparing and setting aside funds for the future and these accounts have long been incentivized with federal tax relief. The DSA Act is a common-sense solution to help mitigate the costly impacts of natural disasters by affording homeowners the opportunity to set aside $5,000 a year in a tax-preferred account for disaster prevention or revitalization. It empowers Americans to take their security into their own hands instead of waiting for an unknown period of time for government assistance or for a costly insurance premium to kick in. I'm proud to introduce the DSA Act to give those in disaster-prone areas better means to prepare for catastrophic weather or begin the road to rebuilding."

The legislation would give homeowners the opportunity to contribute up to $5,000 a year to a tax-deductible savings account, with unused funds rolling over each year. The savings can be used to pay for home fortifications such as a safe room, wind resistant windows and doors, or elevating structures; or for recovery expenses to help fill the gap between insurance deductibles and other recovery funds. In the case of accessing the DSA account for recovery expenses, the event must be a state or federally declared disaster with uninsured losses totaling at least $3,000.

"We never know if or when a disaster like the one Oklahoma experienced last May will happen again, but one thing we learned is that we need better ways to allow Oklahomans to plan for future natural disasters," said Mayor Glenn Lewis of Moore, Okla. "The disaster savings account that Senator Inhofe's bill would create is an essential tool in preparing for the unexpected and would help reduce out-of-pocket costs before homeowner's insurance is triggered."

Oklahoma Insurance Commissioner John Doak said, "Here in Oklahoma it's not a matter of if a natural disaster will strike, but when. Our best defense is to be prepared. This bill will help Oklahomans prepare for and recover from a tornado or other disaster. I appreciate the leadership of Sen. Inhofe on this issue and I am happy to support his bill."

U.S. Rep. Dennis Ross (R-FL-15) introduced the companion legislation in the U.S. House of Representatives. The DSA Act has been endorsed by Lowe's Home Improvement, The Home Depot, FLASH (Federal Alliance for Safe Homes), Reinsurance Association of America, National Association of Home Builders, SmarterSafer.org, and The Nature Conservancy.

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