The National Association of Realtors this week offered testimony to Congress in support of affordable disaster insurance for homeowners.
“Options for obtaining and maintaining coverage for natural disasters are dwindling,” stated association president Thomas M. Stevens. “America’s hard-working families deserve a comprehensive federal natural disaster policy that makes natural disaster insurance available and affordable and reduces the circumstances under which insurance companies cancel these insurance policies.”
The trade group, in its statement to the House Subcommittee on Housing and Community Opportunity, called attention to the association’s research in Florida, which found that “the lack of affordable or available homeowners’ insurance in that state contributed to a slowdown in Florida real estate markets.”
That real estate slowdown “can presage a slowdown in overall economic activity in the region. A strong housing market is a linchpin of a healthy economy, generating jobs, wages, tax revenues and a demand for goods and services. In order to maintain a strong economic climate, the vitality of residential and commercial real estate must be safeguarded,” the association stated.
“We cannot emphasize enough that the ultimate victims of this homeowners crisis — and let us assure you that in many states in the Southeast, it is a crisis — are consumers frustrated in their attempt to realize the American Dream of home ownership. The inability to obtain affordable homeowners insurance is a serious threat to the residential real estate market.”
The association also stated that if disaster insurance coverage is an option, buyers may choose not to purchase a home because the insurance is too costly, while others may choose not to carry the insurance.
If a homeowner cannot maintain insurance required by a mortgage lender, that can lead to mortgage default. Also, insurance costs for apartment buildings can be passed on to tenants through higher rent costs. “This impacts housing affordability, particularly for low-income renters and buyers,” the association stated.
Also this week, the association announced general support for the Flood Modernization and Reform Act, H.R. 4973, which seeks to strengthen the National Flood Insurance Program. This bill passed the House of Representatives on Monday.
The association has backed provisions in the legislation “for increasing premiums on repetitive loss properties that have a significant impact on NFIP, increasing coverage limits, reducing the waiting period for policies to become effective, creating a national levee inventory, and requiring FEMA to report to Congress on the financial status of the NFIP,” according to an announcement this week.
The association, though, has not endorsed provisions in the legislation “that would eliminate subsidies on non-primary residences and business properties,” and also takes issue an amendment that could lead owners of neighboring primary residences that have identical flood risks to pay different rates for flood insurance.
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