Studies of Voluntary Community-Based Flood Insurance Optionsby Representative Gwen Moore
Posted on 2013-03-12
MOORE. Mr. Speaker, I yield myself such time as I may consume.
I would love to express my appreciation to my original cosponsors of this bill, chair emeritus, House Financial Service Committee Representative Spencer Bachus, for his support, and my other cosponsor and friend on the committee, Representative Hinojosa.
I believe that a community-based flood insurance option may eventually provide a cost-saving option for communities within the larger framework of the overall National Flood Insurance Program. The potential for savings and community empowerment certainly merits a study.
Now, as Mr. Luetkemeyer has indicated, this bipartisan bill has passed in various forms, the latest being in the 112th Congress, as H.R. 6186 last September, 364-11, so this is nothing new; and I would submit that we should support it here today.
This approach has merit because its potential lower rates are due to the streamlined underwriting, increased participation, the critical mass of citizens that are involved, and incentives for the community to mitigate future flood risk. There's also an option of providing lower- income households the use of vouchers to purchase flood insurance as part of the group.
An analogy for the concept applied is group or employee health insurance coverage versus individual coverage. We all understand that group coverage is less expensive than individual coverage due to many advantages of economies of scale.
Now, in this case, a community, rather than an individual, would be the policyholder. This brings me to another very important potential benefit of this approach, the increased incentives for communities to take preemptive action to mitigate future financial threats from floods in the community. Whereas an individual flood insurance holder has no incentive, nor means to build stronger levees or dikes, a community policyholder would have the means and incentives to take those kinds of precautions.
In theory, the homeowner would pay insurance, like a utility bill, on a monthly or quarterly basis, which also makes it easy to administer. This bill only asks FEMA to examine the costs and benefits of using this approach on an ongoing basis as an option for communities.
We need to continue to seek creative, market-based solutions to problems; and this study is the first good step toward new tools to strengthen the National Flood Insurance Program.
Seeing no other Democratic Members wishing to speak, I urge my colleagues to support H.R. 1035; I yield back the balance of my time.