Bipartisan legislation has been introduced in the Senate and the House to delay increases in premiums for the federal flood insurance program.
The Biggert-Waters Flood Insurance Reform Act of 2012 was passed by Congress and signed by President Obama in July 2012.
The law changed how the National Flood Insurance Program is run, including revisions to how Flood Insurance Rate Map updates impact policyholders and increased premiums to reflect the true risk of flood.
But concern over the increased premiums by trade groups and politicians has prompted legislators to introduce companion bills in both houses of Congress.
In the Senate, Sen. Robert Menendez (D-N.J.) and Sen. Johnny Isakson (R-Ga.) have introduced the Homeowner Flood Insurance Affordability Act.
The proposed legislation “will protect millions of homeowners from facing huge flood insurance premium rate hikes,” according to a joint statement from Menendez and Isakson.
The bill will also require that the Federal Emergency Management Agency complete an affordability study, propose solutions to address affordability issues and certify that the mapping process is accurate before any flood insurance premiums can be raised in the future.
If the legislation becomes law, then implementation of higher premiums will be delayed on grandfathered properties and properties with a new flood policy purchased after July 6, 2012, before they were legally required to purchase insurance.
Properties sold after July 6, 2012, would also benefit, with new homeowners and business owners receiving the same treatment as the previous owners unless they trigger another provision in the Biggert-Waters law.
National Association of Home Builders Chairman Rick Judson noted that the bill would delay premium hikes for four years.
“These provisions in the insurance reform bill will prevent undue hardship on the recovering housing market, help current and future policyholders keep their premiums affordable, prevent home values from dropping, and make the National Flood Insurance Program more effective for years to come,” Judson stated.
Co-sponsors of the senate bill include several Republicans and Democrats.
In the House, Reps. Michael Grimm (R-N.Y.) and Maxine Waters (D-Calif.) introduced a companion bill co-sponsored by 35 other representative
s.
Other trade groups to throw their support behind the legislation include the Independent Community Bankers of America and the National Association of Federal Credit Unions.
“Unless Congress acts, the flood insurance rate increases due to the Biggert-Waters Flood Insurance Reform Act of 2012 would make flood insurance unaffordable for many policyholders who built to code and followed the law every step of the way,” ICBA President and Chief Executive Officer Camden R. Fine said in a written statement.
