The Flood Insurance Reform Act of 2004

The Flood Insurance Reform Act of 2004 was passed as an update to the National Flood Insurance Act of 1968. The purpose of the law was to change the way losses were treated on properties located in certain geographical areas of the country subject to “repetitive” flood losses. It sought to reduce loss exposure for FEMA by limiting the amount payable on properties that are subject to multiple claims experience.

About the Flood Insurance Reform Act

The law explained that of the more than 4 million homes that are insured under the National Flood Insurance program administered by FEMA, roughly 1 percent of those homes accounted for 1/4th to nearly 1/3rd of claims losses.  These losses cost American taxpayers $200 million annually.

The bill also eased the administrative process for homeowners who participate in the National Flood Insurance Program.  It streamlined the process for obtaining information about flood insurance protection, making claims and appealing an adjuster’s decision relative to the cost of damage caused by a flood.

The law was sponsored by Senator Jim Bunning of Kentucky in the Senate and Representative Doug Bereuter of Nebraska.  The bill was signed into law by President George Bush on June 30, 2004.

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