Rep. Jeb Hensarling views the vast damage caused by Hurricane Harvey and imminent damage from Hurricane Irma as a motivation to redouble his efforts to reform the flood insurance program this fall, to stop the federal government from encouraging people to live in dangerous areas.
“This is beyond just a fiscal problem. This is a moral problem,” the House Financial Services Committee chairman said Wednesday of the program, which is nearly $25 billion in debt and will likely need authorization to borrow more to pay out claims from Houston and other areas hit by hurricanes.
Hensarling, a Texas Republican, favors a short-term reauthorization of the National Flood Insurance Program before it is scheduled to lapse at the end of the month so that claims from policyholders in Houston will be processed. He said leadership will aim to move a 90-day reauthorization that will include one bipartisan reform to encourage private insurers to offer flood policies.
Hensarling the wants a broader, more ambitious revamp of the program, something that had lost momentum in the weeks before Congress left for August, and before the storms hit.
“When we look at the fatalities, when we look at the economic carnage, shame on us if we don’t take an opportunity to reform this program,” Hensarling said.
By providing subsidies for flood insurance policies, he said, the federal government incentivizes people to live in areas prone to flooding.
He also argued that the current federal “monopoly” on flood insurance creates a situation in which some people who should have insurance do not, and noted that the vast majority of flooded homes in Houston did not have policies. If private insurers were able to compete, he said, they would advertise to people in dangerous areas, and educate them about the risks.
Hensarling’s committee has advanced a package of bills to reform and downsize the program, including one to increase rates on insurance policies and another to limit access to policies for homes that submit multiple claims.
The measures have received opposition from some representatives of coastal states from both parties.
On Wednesday evening, Hensarling’s Democratic counterpart on the panel, Rep. Maxine Waters of California, published a commentary opposing major reforms to the program before reauthorization, calling Hensarling’s plans “dangerous.”
