In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act and rates started rising In October. The bill was passed with strong bipartisan support in the hopes of ending a $24 billion deficit in the National Flood Insurance Program and was designed to make property owners pay for the risk of living in high-risk flood areas including coastal areas of Florida, New York, New Jersey, Louisiana and Texas, as well as inland states prone to river flooding.
On Monday Jan 27th, a bill to delay these increases in federal flood insurance premiums for millions of American homeowners and small businesses cleared for floor action, which could begin as early as Wednesday.
On an overwhelming vote of 86-13 to overcome a 60-vote threshold to begin debate, the Senate advanced the Homeowners Flood Insurance Act, which would postpone rate hikes for four years. The bill would delay the rate hikes to give the Federal Emergency Management Agency time to complete an affordability study and re-evaluate flood area map accuracy.
Supporters of the bill argue that dramatic increases in premiums could force many US homeowners to give up their homes, which could subsequently lower property values and harm the economy. Opponents of the bill claim that a delay in rate hikes will force taxpayers to continue to aid in covering insurance costs of high-risk flood areas.
Nearly 1/3 of the 100 Senate members are sponsors of the bill and 181 of 435-members House of Representatives are sponsors of a similar measure. “The problem is going to be down at the other end of that hallway,” Senator Bill Nelson said referencing the House. “Because the speaker of the House has already said that he doesn’t like it, but what he’s going to find out that he doesn’t like is a lot of the members of the House of Representatives whose constituents are facing tenfold increases in their flood insurance.” The bill may face opposition in the GOP-controlled House, where Republicans are hoping to transition to a private market system for flood insurance.
Stay tuned for future updates on the flood insurance bill. If you have any questions about your flood insurance policy, contact us today.
For all your flood insurance needs, call Avante at 305-648-7070.