Bill Overview
Title: To amend the Internal Revenue Code of 1986 to exclude from gross income certain income from providing homeowner's insurance following certain federally declared disasters.
Description: This bill excludes from the gross income of specified insurance companies (other than life insurance companies) certain income from providing homeowner's insurance after a federally declared disaster.
Sponsors: Rep. Higgins, Clay [R-LA-3]
Target Audience
Population: People living in areas prone to federally declared disasters
Estimated Size: 170000000
- Insurance companies are directly impacted as they will have altered tax obligations.
- Policyholders might be impacted indirectly if insurance companies adjust premiums or policies based on tax savings.
- Homeowners who live in areas prone to federally declared disasters may see changes in insurance availability or pricing.
- Tax revenue might be affected, indirectly impacting public services or programs.
Reasoning
- The policy primarily impacts insurance companies, which could result in reduced tax liabilities for them. This may indirectly affect homeowners if these savings are passed on as lower premiums.
- People living in disaster-prone areas might notice changes in the availability or cost of insurance, potentially affecting their wellbeing.
- In terms of budget constraints, efficiency in targeting the affected population is necessary because a substantial number could be indirectly impacted.
- The policy is likely to have varied impacts depending on the frequency and severity of disasters in different regions.
- Some individuals will experience no impact if their insurance practices and premiums remain unchanged.
- It is important to consider both immediate and long-term effects, especially for those repeatedly affected by annual disasters.
Simulated Interviews
Teacher (Miami, FL)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- If insurers save on taxes and pass on those savings, it could lower my premiums.
- I'm concerned about whether this impacts the federal budget and public services we receive.
- It seems like a good idea as long as insurers don't just pocket the extra money.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Insurance claims adjuster (Houston, TX)
Age: 52 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- This policy could stabilize the insurance market in disaster areas.
- It may have indirect benefits for homeowners, but it could also mean us adjusters deal with fewer claim disputes.
- I'm not sure if it's fair that potential tax savings might not reach the homeowners.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 6 | 6 |
| Year 20 | 5 | 5 |
Freelance Writer (California, CA)
Age: 45 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- I don't see how this will directly impact me.
- Seems like homeowners might benefit but only if insurers pass on savings.
- I'm more concerned about renter protections and policies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Chef (New Orleans, LA)
Age: 39 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 2/20
Statement of Opinion:
- If this policy means cheaper insurance, that would help our finances a lot.
- I trust that the insurance companies will actually lower premiums.
- We get flooded every other year so any reduction in costs would be beneficial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 4 |
| Year 5 | 8 | 4 |
| Year 10 | 8 | 3 |
| Year 20 | 7 | 2 |
Retired Engineer (Tampa, FL)
Age: 60 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- I see this as beneficial long-term if insurers are transparent.
- I hope it helps to avoid another scenario where insurance becomes unaffordable.
- There's always a worry that tax savings won't trickle down.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Software Developer (San Diego, CA)
Age: 29 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- I don't expect much immediate impact since I'm not near a disaster-prone area.
- If it prevents disasters from making insurance too expensive for others, that's good.
- My concern is whether this will impact public services through reduced tax revenues.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Emergency Services Coordinator (Phoenix, AZ)
Age: 31 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- Anything that helps speed up recuperation after a disaster is good.
- For people directly affected, this could be valuable if insurers adjust accordingly.
- I worry about the federal spending versus private savings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 4 |
Small Business Owner (Charleston, SC)
Age: 48 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- Reducing insurance costs for homes might free up money for business investment.
- The impact could be bigger if this affects business insurance too.
- It's essential that these changes translate into significant savings for homeowners.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Musician (Nashville, TN)
Age: 56 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- I see it as a beneficial policy for those really exposed to disasters.
- The indirect benefits for me might be minimal, hopefully it encourages better insurance practices overall.
- Ultimately, I’m watching how it impacts the federal budget.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Graduate Student (Boulder, CO)
Age: 27 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- It’d be nice if homeowners near me faced less financial strain due to fires.
- I don’t think this will affect rental prices unless landlords’ costs change.
- Overall sounds good if long-term insurance becomes more accessible for everyone.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Cost Estimates
Year 1: $30000000 (Low: $10000000, High: $50000000)
Year 2: $32000000 (Low: $11000000, High: $53000000)
Year 3: $34000000 (Low: $12000000, High: $56000000)
Year 5: $37000000 (Low: $13000000, High: $59000000)
Year 10: $45000000 (Low: $15000000, High: $70000000)
Year 100: $200000000 (Low: $100000000, High: $300000000)
Key Considerations
- The policy targets insurance companies operating in federally declared disaster areas, primarily affecting their tax liabilities.
- Tax revenue reductions could impact federal budgets and potentially limit funding for other programs.
- The variability in disasters has to be considered as it can drastically change exemption amounts year by year.
- Insurance companies might pass savings onto policyholders, potentially affecting insurance affordability and coverage levels.