A proposal delaying flood insurance rate hikes for four years has bipartisan support and is expected to be presented today by a bipartisan group of U.S. Senators.
Last year, with the passage of the Biggert-Waters Act, 1.1 million homeowners were anticipating higher premiums. According to some reports, new flood maps, particularly in the South, could have raised premiums from a few hundred dollars a year to more than $20,000 annually.
The new legislation would attempt to delay the new higher rates for people purchasing homes from someone who currently has a subsidized policy or people who face higher rates when flood maps are updated. Also, in an attempt to protect home values, the new legislation would allow homeowners who receive subsidies and haven’t experienced flooding recently to pass on those subsidies to potential buyers.
Senators Mary L. Landrieu (D-La.), Johnny Isakson (R-Ga.), Robert Menendez (D-N.J.), Jeff Merkley (D-Ore.), Thad Cochran (R-Miss.), Heidi Heitkamp (D-N.D.), David Vitter (R-La.), and John Hoeven (R-N.D.), are among those sponsoring the legislation in the Senate.
The Federal Emergency Management Agency also would be charged with conducting a study on the affordability of imposing risk-based rates on homeowners and proposing ways to tackle affordability issues under the proposed legislation.
The flood insurance program was designed to offer below-cost rates for homeowners in flood zones and has incurred $25 billion in debt since 1968. The National Flood Insurance Program was de-subsidized in 2012 as part of the Biggert-Waters flood insurance reform law, a measure that was attached to a federal transportation bill and coupled with an extension of federal student loan subsidies.
"There is no logical reason why New Jersey homeowners who weathered Superstorm Sandy and are struggling to put their lives together should lose the support of the federal government in keeping their home," Menendez said. "The sharp premium increases that have already gone into effect are an unnecessary and cruel burden on those who have already borne enough hardship following Superstorm Sandy."
The rate hikes’ original pairing with student loan legislation blurred the issues, and the legislation surrounding the NFIP took a back seat. Therefore, several politicians who voted for the Biggert-Waters Act are now supportive of new legislation to delay some of its effects.
Floridians, however, are happiest to see progress on this matter. U.S. Sen. Bill Nelson, D-Fla., announced his support Monday for the bipartisan legislation.
"This is great news for many Floridians who've been told their flood insurance rates were going way up," Nelson said.
Despite the current momentum and a bipartisan victory in the house earlier this year, an amendment that proposed halting the rate hikes for five years was blocked in the Senate only last month, and House and Senate leaders haven’t addressed the topic as of yet.
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