To amend the National Flood Insurance Act of 1968 to allow for the consideration of private flood insurance for the purposes of applying continuous coverage requirements, and for other purposes.
Summary
H.R. 6620 amends the National Flood Insurance Act of 1968 to allow consideration of private flood insurance for continuous coverage requirements. This means that periods covered by private flood insurance policies can be recognized when determining if a property has maintained continuous flood insurance coverage. This change impacts requirements under the National Flood Insurance Program (NFIP).
Expected Effects
The bill will broaden the definition of continuous coverage to include private flood insurance. This could potentially lower insurance costs for homeowners by allowing them to switch between NFIP and private insurance without penalty. It also increases consumer choice in flood insurance options.
Potential Benefits
- Increased consumer choice in flood insurance options.
- Potential for lower insurance costs for homeowners.
- Greater flexibility in meeting continuous coverage requirements.
- May encourage more private insurers to enter the flood insurance market.
- Simplifies compliance with flood insurance requirements for property owners.
Potential Disadvantages
- May lead to adverse selection if private insurers cherry-pick low-risk properties, leaving NFIP with high-risk properties.
- Potential for confusion among homeowners regarding coverage requirements and policy terms.
- Could undermine the financial stability of the NFIP if too many policyholders switch to private insurance.
- Increased complexity in administering continuous coverage requirements.
- Possible challenges in verifying private flood insurance coverage.
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution (Preamble) by aiming to provide more affordable and accessible flood insurance options. Congress's power to regulate commerce (Article I, Section 8) provides a basis for legislating on insurance matters that affect interstate commerce. The bill does not appear to infringe upon any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).