Velázquez Fights to Expand Flood Insurance for Working Families

On Tax Day, Unveils Proposal to Establish Tax Credit for Flood Insurance Purchase

Washington, DC—In 2017, powerful hurricanes tore through communities across the Atlantic, spurring extreme flooding and contributing to the costliest year for natural disaster on record. As flooding continues to be the number one disaster in the United States, Rep. Nydia M. Velázquez (D-NY) is fighting to expand affordable flood insurance for working families. Today, on Tax Day, Velázquez unveiled a new bill, the Flood Insurance Tax Credit Act of 2018, which would establish a tax credit to assist families and working New Yorkers who need flood insurance.

"While natural disasters may be hard to predict, their wrath and destruction are not to be underestimated—something that unfortunately, New Yorkers are too familiar with," said Velázquez.

"As our climate changes, it is not a question of if, but when, we will next encounter severe weather. My bill will put flood insurance in reach for more working families, ensuring they are better protected the next time a major storm hits New York City."

In 1968, Congress created the National Flood Insurance Program (NFIP) to make up for deficiencies in the private market. With studies showing that affordability remains a major roadblock for families looking to purchase flood insurance, Velázquez's bill would provide financial relief in the form of a tax credit. While recent statistics place the average cost of flood insurance policy at $700 per year, the amount varies depending on the level of flood risk in any given location. For example, a home with the maximum coverage of $250,000 for the dwelling and $100,000 for possessions, premiums can exceed $2,500 per year. Specifically, the Flood Insurance Tax Credit Act of 2018 would create a new tax credit for flood insurance expenses for taxpayers who are covered under NFIP.

"Today, as our nation marks Tax Day, I am introducing an effort to give working families and homeowners in flood prone areas a meaningful tax break," said Velázquez. "No hardworking person should be kept up at night worried about whether they can afford to protect their home from the next destructive storm."

To ensure that the proposed tax credit would reach families who need it the most, the credit would be phased out based on a taxpayer's income. In terms of eligibility, the credit will be available in full to those making $50,000 or less and half the credit will be available for those making up to $100,000. Assuming a taxpayer files jointly, the income caps will be doubled. The credit will not be available to those who make over $100,000 a year.

"In 2017, Republicans in Congress passed a massive tax scam that benefited the wealthiest 1 percent and large corporations at the expense of working families and seniors," Velázquez said. "New Yorkers deserve real tax reform and this legislation will help our neighbors who live near coastal areas."

In 2012, Superstorm Sandy devastated coastal regions of New York and New Jersey, causing approximately $60 billion in damage and leading thousands of homeowners to file insurance claims. Since then, Velázquez has led multiple initiatives to bring transparency, oversight and reform to NFIP. Her bill, H.R. 2875 passed in the House Financial Services Committee unanimously in 2017 and would reduce fraud and ensure policyholders are able to obtain the claims they are owed after floods.