The bipartisan flood insurance bill overwhelmingly passed through the House on March 4, just a month after the Senate passed similar legislation on January 27. The legislation will block major upticks in insurance premiums for home owners who live in high-risk flood areas. The Senate may vote on the House version as soon as the end of the first week of March.
The House bill, Homeowner Flood Insurance Affordability Act states that premiums under the National Flood Insurance Program couldn’t surpass an annual increase of 18 percent her property.
The legislation came after the 2012 Biggert-Waters law, which was designed to increase the rates of those in flood-risk areas to help reduce the $24 million of debt caused by flood damage.
The bill was passed with strong bipartisan support to try to end that deficit, which was largely caused by Hurricane Katrina. But after Superstorm Sandy hit the East Coast, a new pile of insurance claims came through.
“This issue isn’t just about insurance rate tables and actuarial risk rates – fundamentally it’s all about people,” Democratic Senator Robert Menendez of New Jersey, a chief sponsor of the bill, told Reuters.
The affordability act is set to delay premium tax hikes for those living in high-flood risk areas for four years, which will give the Federal Emergency Management Agency enough time to re-evaluate the accuracy of its flood maps and to finish an affordability study.
Opponents of the bill believe that taxpayers will be forced to deal with the cost of insurance for those people living in high-risk flood areas. However, the bill is backed by a number of organizations, including the National Association of Homebuilders, the National Association of Realtors® and the American Bankers Association.