Within two years after the law is enacted, FEMA would be required to measure the level of risk underwritten by private insurers in comparison to the risk underwritten by the NFIP. It would modernize coverage limits to align with actual replacement costs of residential and non-residential structures. It would increase coverage limits from $250,000 to $500,000 for residential structures and $500,000 to $1,000,000 for multifamily and businesses structures to mitigate financial loss and enhance coverage for the replacement value of structures in competitive property markets. The bill further calls for creation of a pilot risk-sharing program with Write Your Own companies. It instructs FEMA to engage in NFIP risk-sharing pilot programs where WYO companies or other qualified insurers assume a first-loss position of claims at or below $50,000 and the NFIP operating in a secondary loss position. In the area of affordability, the legislation: Provides for affordability vouchers for certain owner-occupied households for which flood insurance premiums and fees would result in housing costs exceeding 40 percent of household income. Provides greater investment in flood mitigation and resiliency of approximately $400 million annually. Increases cost of compliance (ICC) coverage. Currently, ICC claims payments must be used to fund up to $30,000 in compliance costs associated with state or local floodplain management laws or ordinances, which typically require structure elevation. The authors contend this limit of $30,000 is inadequate to elevate most structures and thus increases ICC coverage to $75,000 with $30,000 of ICC payments allowed to occur outside policy limits.
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