This bill establishes a federal backstop program administered by the Treasury Department to protect home insurance companies from insolvency when catastrophic natural disasters cause widespread damages. The program covers residential property losses from hurricanes, earthquakes, wildfires, tornadoes, and other disasters (but not floods, which are covered separately) and applies only to disasters occurring after January 1, 2026. States can voluntarily participate by submitting an approved insurance plan, and when insured losses from a covered disaster exceed a state-specific threshold, the federal government will pay insurers the excess amount through Treasury-issued bonds that states must repay over 10 years with interest. The trigger amounts—which determine when federal payments kick in—will be calculated by the National Academy of Sciences based on each state's insurance market size and the likelihood of severe disasters, reviewed every two years. The program aims to make disaster insurance more affordable and available in the marketplace while ensuring insurers remain solvent during major catastrophes.
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