Insurance / Natural Disaster Policy

Insurers have responded to major natural catastrophes by raising insurance rates, reducing coverage and declining to write new or renewal policies. NAR supports the development of federal disaster public policies that emphasize prevention, preparedness and the proactive reduction of risk while including emergency aid for disaster victims.

Without adequate insurance, property owners must turn to the federal government for taxpayer-funded disaster assistance, which typically means a low-interest SBA loan that must be repaid with the mortgage.

NAR supports the development of federal disaster policies that meet the following principles:

1. Pre-disaster prevention, preparedness, and the proactive reduction of risk should be emphasized, but post-disaster emergency assistance included;
2. Private insurance markets should be promoted to assume more risk;
3. Premiums should align with property specific risk and not include major surcharges, assessments or cross subsidies;
4. Higher building codes and ordinances should be encouraged that avoid costly property damage;
5. Pre-disaster mitigation assistance should be provided to current homeowners; and
6. Full transparency, disclosure and mapping is required for informed real estate decisions.

Opponents assert that taxpayers are being asked to bailout people who choose to live in harm's way.  Yet, many people made those decisions before hazard information became available and now must rely on federal disaster relief until more proactive public policies can be established.

NAR has adopted a multi-bill strategy to advance the natural catastrophe policy debate, including:

• Supporting federal assistance and incentives for proactive risk mitigation projects;
• Promoting the full transparency, disclosure and mapping of natural disaster risks; and
• Clarifying insurance coverage under the NFIP where there is wind versus flood damage.

NAR will continue to raise the profile of the issue and support the adoption of forward-looking disaster policies.

The Congressional authorizing committees have not introduced legislation at this time.