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119-hr-827119th CongressWALLET

Homeowners’ Defense Act of 2025

Sponsored By: Representative Wilson, Frederica S. [D-FL-24]

Introduced

Summary

Creates a federal backstop of guarantees and reinsurance to help state catastrophe insurance programs pay large residential losses. It also sets up a national risk consortium and funds mitigation grants to reduce future damage.

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 5 benefits, 0 costs, 1 mixed.

Federal guarantees for state disaster insurance debt

If enacted, Treasury could guarantee debt that State catastrophe programs issue after extreme events. Total guarantees would be capped at $3.5 billion for earthquakes and $17.0 billion for other perils. Each guarantee would start with a 3‑year commitment, could extend yearly, and the debt term could not exceed 30 years. Fees could be charged but not more than 0.5% per year. Coverage would kick in only when insured losses exhaust most program funds, and it would not cover flood losses for properties that must carry flood insurance or are in special flood zones. If a State program cannot pay bondholders, Treasury would pay principal or interest due and then recover the money from the program.

Federal reinsurance for state disaster programs

If enacted, Treasury could sell reinsurance only to certified State catastrophe programs. Each contract would cover 80%–90% of insured losses above the State program’s retained losses, usually for one year. Claims would need to be reported within three years, and prices would be actuarially sound to cover expected claims and costs. A federal fund would hold premiums and any appropriated amounts, invest them, and pay claims and program costs. Treasury would report the fund’s net investment income within 60 days after each fiscal year and send funds within 90 days to support mitigation grants as allowed by Congress.

State standards to qualify for federal backstops

If enacted, Treasury would certify only State programs that meet strict rules. Boards must be mostly public officials, the State must have a financial stake, and programs may not distribute net profits to participating insurers. States would need mitigation programs, modern building codes, and premium rates that reflect mitigation savings yet still cover expected future costs, including the cost of capital. Programs must meet risk‑based capital standards, publish possible assessments or surcharges for big events, and file annual reports on claim‑paying capacity. Some existing State entities could qualify for up to five years. Treasury would also write the rules to run these certifications and programs.

Grants to help homeowners prevent losses

If enacted, HUD would run a Mitigation Grant Program. States, local governments, or certain national nonprofits could get funds for public education, risk mapping, home inspections, and money to help homeowners retrofit their homes. HUD would favor applicants serving lower‑income people and areas. If Congress provides the funds, at least 35% of the federal reinsurance fund’s yearly net investment income would be used for these grants.

National group to track catastrophe risks

If enacted, a National Catastrophe Risk Consortium would be created and led by Treasury. Any State could join. It would track insurers’ catastrophe obligations, study affordability and market gaps, include consumer and minority voices, and report to Congress each year. It could be funded for fiscal years 2026 through 2029.

Studies on pricing and rental coverage

If enacted, two fast studies would be ordered. The Comptroller General would report within six months on State program pricing, whether rates cover future costs, and impacts on policyholders. Treasury would also study whether to extend these programs to insurance for mostly residential rental buildings, including effects on renter affordability and market capacity.

Sponsors & CoSponsors

Sponsor

Wilson, Frederica S. [D-FL-24]

FL • D

Cosponsors

  • Rep. Johnson, Henry C. "Hank" [D-GA-4]

    GA • D

    Sponsored 2/21/2025

  • Rep. Mfume, Kweisi [D-MD-7]

    MD • D

    Sponsored 6/6/2025

Roll Call Votes

No roll call votes available for this bill.

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