On Friday, U.S. Rep. Blaine Luetkemeyer (MO-03) introduced legislation that would require the Federal Emergency Management Agency (FEMA) to look at properties on an individual basis and incorporate a structure’s actual replacement cost in National Flood Insurance Program policies.  

“The current National Flood Insurance Program (NFIP) fails to do what private insurance policies do: price for risk,” Luetkemeyer said. “Instead, the NFIP relies on a pricing system in which policyholders in less expensive homes subsidize those in more expensive ones. Insurance policies from private carriers take into account for pricing and underwriting purposes the cost to completely replace a structure. The Federal Emergency Management Agency (FEMA) uses an average replacement cost calculation instead of a property-specific one. My legislation would ensure that FEMA would use a property-by-property approach when it comes to pricing for premiums, helping to end the subsidization by everyday Missourians of America’s wealthier homeowners. This legislation is the next step in getting the federal government to adhere to policies and procedures that have been in place in the private sector for decades. This legislation combined with my recently introduced Taxpayer Exposure Mitigation Act, which takes the first steps in reforming the NFIP by returning power to homeowners and local communities, will help lead our country to a more fair and equitable flood insurance program.”