Tax break for flood insurance benefits the wealthy, leaves poor homeowners behind

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 deduction could reduce market pressure on private flood insurers and the NFIP to price premiums accurately, potentially masking the true cost of flood risk and encouraging development in high-risk areas.
• The income cap ($200k/$400k AGI) excludes many middle-class homeowners in high-cost-of-living areas where flood risk is significant, creating a narrow band of beneficiaries.

Who it affects

The deduction provides real tax relief to property owners who carry flood insurance, reducing their federal tax burden. However, the benefit is capped at higher-income households ($200k/$400k AGI threshold), meaning lower-income flood-prone residents—who often face the highest flood risk and insurance costs relative to income—receive no benefit. The deduction also indirectly subsidizes the flood insurance market by making premiums cheaper for those who can claim it, potentially reducing pressure

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

Named in the bill

National Flood Insurance Program (NFIP), National Flood Insurance Act of 1968, Flood Disaster Protection Act of 1973, Internal Revenue Code sections 62, 74, 86, 135, 137, 219, 221, 224, 469, Code of Federal Regulations Title 44 Part 61, AIG, Federated National Holding Company (FNHC), Heritage Insurance Holdings (HRTG), Homeowners Choice Inc. (HCI), Primerica Inc. (PRI), Prudential Financial (PRU)

Where it stands

1 cosponsor: 1 Republicans.

• Jul 16, 2025 — Introduced · Congress.gov: “Introduced in Senate”
• Jul 16, 2025 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

4 lobbying clients named this bill on 7 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $6,060,000 in lobbying spend. A filing names 43 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 72% of bills with at least one filing.

Rick Scott, the sponsor, reported $69,750 in PAC receipts in the 2026 cycle.

• American Property Casualty Insurance Association — $3,540,000 on 2 filings
• Mortgage Bankers Association — $1,220,000 on 1 filing
• United Services Automobile Association — $890,000 on 2 filings
• Independent Insurance Agents & Brokers of America — $410,000 on 2 filings

Lobbying Disclosure Act filings through Jul 22, 2026. A filing shows who paid to lobby on a bill it names, not what changed.