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Bill Addresses High Insurance Costs in Disaster-Prone States
Legislation supported by NAHB that would help reduce the high cost of home owners' insurance in states prone to natural disasters cleared the House on Nov. 8 by a vote of 258 to 155.
H.R. 3355, the Homeowners' Defense Act of 2007, would provide a much-needed solution to ensure the long-term availability and affordability of comprehensive property and casualty insurance, according to NAHB.
Specifically, the bill would establish a National Catastrophe Risk Consortium that would allow the federal government to make loans to qualified state insurance funds if they run short of money or in the event of a major disaster such as hurricanes or the recent wildfires in California.
The measure would authorize $120 million over the next six years to help coordinate the availability of reinsurance contracts between state reinsurance entities and the private market. The bill would also establish two new federal direct loan programs within the Department of Treasury for state reinsurance programs facing certain levels of insured losses following a natural disaster.
NAHB's Property Insurance Task Force developed policy supporting national solutions to provide comprehensive property and casualty insurance for home owners who are vulnerable to natural disasters, but had withheld support for such legislation in the past due to concerns over the federalization of building codes and land use decisions.
Nevertheless, as the debate moved forward in the House, NAHB worked closely with the lead sponsors of the legislation, Reps. Ron Klein (D-Fla.) and Tim Mahoney (D-Fla.), along with House Financial Services Committee Chairman Barney Frank (D-Mass.), to insert new building code and land use language that addressed NAHB concerns.
This revision was incorporated in an amendment offered by Rep. Chris Murphy (D-Conn.) that was subsequently approved by a voice vote.
To view the bill, click here and type the bill number in the box in the upper center screen.
For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144.
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