WASHINGTON, D.C., June 12, 2007—The Independent Insurance Agents & Brokers of America (the Big “I”), the nation’s largest insurance association, testified today before the House Subcommittee on Housing and Community Opportunity in support of The Flood Insurance Reform and Modernization (FIRM) Act of 2007, H.R. 1682.
Tom Minkler, president of Keene, N.H.-based Clark-Mortenson Agency represented the Big “I” in a hearing to review the legislation that would modernize and reform the flood insurance program. He expressed strong support for the legislation and urged the Financial Services Committee to pass H.R. 1682 to help consumers who are vulnerable to flooding and to shore up the National Flood Insurance Program (NFIP) for many years to come
“The National Flood Insurance Program is essential to Americans and to the U.S. economy, and we strongly support your efforts to update it to reflect today’s risks, said Minkler. “Adopting the reforms found in H.R. 1682 would help to make the National Flood Insurance Program more actuarially sound and more effective at serving both consumers and taxpayers.”
Minkler reviewed with the committee the Big “I”’s 23-point plan to restore the National Flood Insurance Program to sound actuarial footing, and was extremely pleased to see a number of IIABA recommended provisions in the proposed legislation. The Big “I” is especially pleased that the bill will modernize the NFIP by increasing maximum coverage limits and by including, at the option of the consumer, the purchase of business interruption coverage, additional living expenses, replacement cost coverage for contents, and basement coverage.
Minkler pointed out the three positive effects that modernization of coverages will have on the NFIP as a whole, “First, it will allow consumers to more adequately insure their properties and valuables against their true risks.” Minkler continued, “This will in turn make the NFIP a more attractive product for consumers, thereby increasing participation in the program. And finally, as optional coverages that are sold at actuarial rates, the modernization will result in a NFIP that is closer to being on actuarially sound footing.”
Minkler also pointed out that the NFIP maximum coverage limits have not been increased since 1994 and since then, the United States has seen a housing market boom of epic proportions. Labor and materials costs have skyrocketed, and yet the maximum indemnity a homeowner can receive for a flood loss is $250,000 or $500,000 for a commercial property.
“Hurricanes Katrina and Rita clearly showed that homeowners and businesses need higher National Flood Insurance Program coverage limits in order to properly insure their properties,” Minkler said. “An increase in the maximum coverage limits will better allow both individuals and commercial businesses to insure against the damages that massive flooding can cause, and we’re grateful that this increase was included.”
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.