Homeowners’ Defense Act of 2025
Homeowners’ Defense Act of 2025
Plain Language Summary
# Homeowners' Defense Act of 2025 Summary **What It Does:** This bill would allow the federal government to help state insurance programs that provide homeowners' insurance, particularly in disaster-prone areas. Specifically, it would let the U.S. Treasury guarantee loans taken out by state insurance programs and provide reinsurance (insurance for insurers) to help them cover major losses from natural disasters.
The bill also creates a new Federal Natural Catastrophe Reinsurance Fund to pay claims when disasters strike. **Who It Affects:** The bill primarily affects homeowners in states with government-backed insurance programs—particularly those in areas vulnerable to hurricanes, floods, and other natural disasters (like Florida, where the sponsor is from). It could also help stabilize insurance markets and potentially keep insurance costs more affordable by reducing the financial risk insurers face during major catastrophes. **Current Status:** The bill was introduced in the 119th Congress and is currently in committee, meaning it hasn't yet been debated or voted on by the full House. It remains in early stages of the legislative process.
CRS Official Summary
Homeowners' Defense Act of 2025 This bill allows the Department of the Treasury to guarantee the debt issued by an eligible state catastrophe insurance program, with limitations on the total amount of debt guaranteed.To qualify, a state program must (1) be established and authorized by state law as an insurance program or a reinsurance program designed to support the private insurance market, and (2) offer residential property insurance coverage for losses arising from any personal residential line of insurance. Treasury must pay the portion of the principal and interest on guaranteed debt due for payment if the state program has insufficient funds.Treasury must also make reinsurance coverage available to eligible state programs. (Reinsurance protects insurers from large losses.) The bill also establishes the Federal Natural Catastrophe Reinsurance Fund, funded in part by the sale of reinsurance contracts, to pay out eligible losses.The bill also establishes the National Catastrophe Risk Consortium which must maintain an inventory of catastrophe risk obligations held by providers of natural catastrophe insurance, among other functions.The Department of Housing and Urban Development must provide grants to entities (such as states) for the purpose of preventing and mitigating losses from natural catastrophes.The Government Accountability Office must report on risk-based rate pricing and state insurance program rates.
Latest Action
Referred to the House Committee on Financial Services.