U.S. Senator Adam Schiff (D-Calif.) has proposed a new federal program to stabilize the nation’s troubled home insurance market. The goal is to make coverage more available and affordable, especially in areas hit by wildfires and floods.
The legislation is called the Incorporating National Support for Unprecedented Risks and Emergencies (INSURE) Act. It would create a federal reinsurance program. Reinsurance is essentially insurance for insurance companies.
This program would cover extreme losses for insurers after a major disaster. This federal backstop would be managed by the Department of the Treasury.
Senator Schiff says the current situation is urgent. “All across America… the most valuable property a family may own is becoming uninsurable. This must be addressed with urgency,” he stated.
The bill is a direct response to a growing crisis. In states like California, Florida, Texas, and Louisiana, many insurers are sharply raising premiums. Some are even pulling out of high-risk markets entirely. This is largely due to increasing costs from climate-related disasters.
The proposed program would start with $50 billion in federal funds. It would cover losses from hurricanes, floods, wildfires, and other severe storms.
Supporters believe a federal option will help. They say it will provide a stable, competitively priced alternative to private reinsurance companies.
Amy Bach of the consumer advocacy group United Policyholders supports the plan. “We are in the grip of an unprecedented national insurance crisis… the INSURE ACT can be the national solution we need,” Bach said.
However, the plan faces opposition. The Reinsurance Association of America (RAA) worries it could disrupt the market. The group says a government-backed program might distort pricing and put financial risk on taxpayers. They also argue it could reduce the incentive for insurance companies to manage their own risk carefully.
The bill includes rules for insurance companies that participate. They must offer policies that cover all types of natural disasters. They also must work with homeowners on plans to prevent losses.
The legislation also seeks to improve market oversight. It would involve several federal offices working with state regulators.
The INSURE Act was first introduced last year and faces a future debate in Congress.
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