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Fair Flood insurance relief bill passes in the Senate
Legislation delays insurance premium rate spikes
The U.S. Senate passed a bipartisan bill on Thursday that will protect tens of thousands of homeowners from facing huge flood insurance premium rate hikes.
The Homeowner Flood Insurance Affordability Act, which passed the Senate with a 67-32 vote, requires the Federal Emergency Management Agency to complete an affordability study and propose real solutions to address flood insurance affordability issues before flood insurance premiums can be raised — which was set to happen under the Biggert-Waters Flood Insurance Reform Act of 2012. The legislation now moves to the House of Representatives for a vote, and U.S. Sen. Charles Schumer is urging the body to take up the legislation without delay.
“New Yorkers are still recovering from the destructive force of Superstorm Sandy and back-to-back years of extreme weather and flooding,” Schumer said. “This bill prevents for many the injustice that these homeowners were going to face – increased flood insurance premiums that can break the bank.”
Schumer said that the legislation would help protect many homeowners from increased flood insurance rates that were set to be imposed by Biggert-Waters. The law, passed before Sandy, restructured the National Flood Insurance Program in order to make it more financially sustainable. It removed subsidies that kept federal flood insurance premiums low, and homeowners faced a 25 percent increase in premium rates each year until their new premium amount was reached.
Biggert-Waters requires FEMA to conduct an affordability study of the higher premiums and their impact on homeowners, as well as to make recommendations to Congress on ways to maintain affordability through targeted assistance. Although the study was due on April 6, 2013 it has yet to be commenced by FEMA, Schumer said, and premiums could go up before the affordability study is completed, which is at odds with congressional intent.
“The bottom line is that FEMA must do the required affordability study first,” he said. “It makes no sense to raise flood insurance rates before we consider how homeowners will be able to afford to pay them.”
