United StatesFEMA would test community insurance for major disaster risks
Using money Congress later provides, FEMA would award grants to eligible governments and community groups to test shared insurance for properties facing major uninsured disaster losses.
What it does
Using money Congress later provides, FEMA would run a competitive pilot within one year of enactment. Eligible governments and groups could seek grants to design or carry out shared disaster insurance.
Grant-backed policies would have to add to available property insurance, cover named high-risk hazards, explain costs and limits clearly, and follow state rules. Some could make fixed payments when a preset disaster trigger occurs.
Congress’s audit agency would review whether the pilot delivers timely, affordable help and supports recovery. Grant recipients would share performance data while keeping protected business information confidential.
Argument forIf funded, shared coverage and risk-reduction support could help high-risk communities recover from losses that ordinary property insurance does not cover.
Argument againstFor trigger-based policies, payments might fall short when the preset hazard measure does not match a household’s actual damage.
More detail
FEMA would award grants to design, develop, or carry out shared disaster insurance programs. Eligible applicants include governments, certain Indigenous organizations, nonprofits, and other FEMA-approved groups able to arrange coverage for a defined area. FEMA would select grantees competitively, seeking varied locations, high financial exposure, and plans backed by enough capital and partnerships. The proposal allows Congress to provide up to $20 million yearly from fiscal 2027 through 2031 but supplies no money itself. FEMA would have to establish the pilot within one year after enactment. Its authority to run the pilot would end September 30, 2031.
Grant-backed insurance products would have to meet consumer safeguards and follow state insurance law. These rules would cover every community insurance product designed, developed, arranged, or put into use with a pilot grant. Products must add to, not replace, property insurance already available. They must plainly explain coverage, costs, effects on other insurance or disaster aid, and whether joining is voluntary. Trigger-based products must use objective, preset conditions and warn that payments may not match actual losses. Before offering a product, a grantee must ask each relevant state regulator whether it counts as insurance and what licensing or filing rules apply.
Congress’s audit agency would conduct two studies and report its findings and recommendations to Congress. Reviews would examine how well programs serve people and communities, including payment speed, affordability, and recovery results, and would identify barriers to wider use. Grant recipients must share reasonable performance data, but they would not have to reveal confidential business, trade-secret, or catastrophe-modeling information. The first study would be due within one year after three grantees use their programs for a disaster, or within three years after startup, whichever comes first. The final study would be due within one year after the pilot ends.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Oct 1Introduced in HouseLatest
- Oct 1Referred to the House Committee on Financial Services.Introduced
Emergency ManagementConsumer ProtectionGovernment & Ethics