Tax break for flood insurance benefits the wealthy, leaves poor homeowners behind
S. 2313 — Flood Insurance Relief Act · Filed by Rick Scott (R-FL) · 1 cosponsor · Introduced Jul 16, 2025 · Referred to committee
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What it does
This bill creates a new federal tax deduction allowing individuals to deduct qualified flood insurance premiums from their taxable income, but only if their adjusted gross income is below $200,000 ($400,000 for joint filers). The deduction covers premiums paid to the National Flood Insurance Program, private flood insurers, and associated federal fees and surcharges. Homeowners and property owners in flood-prone areas would pay less in federal income tax if they carry flood insurance.
Why we flagged it
The bill's sole function is to create a new above-the-line tax deduction for qualified flood insurance premiums paid by individuals, with an income cap. It is a straightforward tax-code amendment with no hidden mechanisms or riders.
What the text implies
- The deduction may reduce federal revenue significantly if flood insurance uptake increases, shifting the cost of flood risk management from insurers and policyholders to general taxpayers.
- By making flood insurance cheaper for higher-income households, the deduction may entrench geographic inequality: wealthier homeowners in flood zones get tax relief, while lower-income renters and property owners in the same zones do not.
The full analysis lists 4 implications of this text.
Who stands to gain
private flood insurance companies; National Flood Insurance Program (reduced pressure to raise premiums); homeowners with AGI $200k–$400k in flood-prone areas