Some Iowa insurance companies might start selling private flood insurance policies to cover homes if a bill that’s won unanimous House approval becomes law.
Representative Gary Mohr of Bettendorf said these private policies could become a viable alternative to federal flood insurance.
“Seldom do we get a chance in a single bill to help jump start a new, private sector marketplace product in Iowa,” Mohr said. “…With Iowa being a leader in the insurance industry, we see this as a potentially big, new, national private sector marketplace in the residential flood insurance market.”
An eligible insurance company must have a state certificate to do business in Iowa and a company would be required to file rates for its flood insurance policies with Iowa’s insurance commissioner. Representative Jon Jacobsen of Council Bluffs said this could be an important business opportunity.
“Literally not a day goes by without questions from constituents on the flooding,” Jacobsen said. “Flood insurance has been a big issue for them.”
Representative Steven Hansen said because of federal flood insurance program rules, his constituents along Perry Creek in Sioux City face significant hardships.
“Hopefully this will give another alternative for some of those people who either are getting priced out of that market, couldn’t get a mortgage on their house because of it or any other number of problems with the flood insurance program,” Hansen said.
The bill, as written, would only allow private flood insurance policies to cover a primary residence.
A non-profit group called First Street Foundation evaluates flood risks. It estimates nearly 300,000 homes and businesses are at substantial risk of flooding between now and 2050. FEMA is scheduled to announce new rates for the National Flood Insurance Program on April 1.