Insurance Commissioner Teresa Miller Wednesday testified at a Congressional subcommittee on legislation that would help consumers and is in line with Wolf Administration's plans to help homeowners and renters get better access to private flood coverage.
Commissioner Miller testified on behalf of the National Association of Insurance Commissioners, before the House Subcommittee on Housing and Insurance. Her testimony was in support of H.R. 2901, known as the Flood Insurance Market Parity and Modernization Act that would direct lenders to accept qualified private flood insurance for federally-backed mortgages.
Commissioner Miller told the committee that facilitating the entry of additional carriers into the market will provide consumers with access to additional options for flood insurance products.
She said that Pennsylvania is already seeing examples of private carriers offering comparable coverage at a lower cost than the National Flood Insurance Program, the federal government run program that provides most flood insurance; this demonstrates that competition benefits consumers by providing more choices and better prices.
"We have heard stories of consumers getting substantial savings from private flood insurance as opposed to the NFIP product," said Commissioner Miller. "In one particular case, a consumer's annual premium under NFIP was $7,500, but a private plan offered similar coverage for $1,415. In another instance, the federal NFIP premium was $6,000, while private insurance was just $900."
In spite of these potential savings, there are numerous obstacles to making private flood insurance more widely available to homeowners.
"One of the obstacles that we've seen is that many lenders are reluctant to issue mortgages for homes with private flood insurance, because they are not sure the coverage meets the requirements of the federal government," the commissioner testified. "H.R. 2901 would remove that obstacle by requiring lenders to accept private flood insurance if it meets certain coverage criteria and is subject to supervision by state insurance regulators."
Commissioner Miller is currently working to help homeowners and renters find private flood insurance that is available in Pennsylvania. The department will announce more details on this initiative soon.
"While we in Pennsylvania work with insurers to make private flood coverage more available, we need our partners in the federal government to take this important step to make sure mortgages are available to homeowners with private flood insurance," Commissioner Miller said.Wednesday’s testimony follows a letter Commissioner Miller wrote in July, urging Pennsylvania's Congressional delegation to support H.R. 2901.