Senate Passes Flood Insurance Fix Bill
On Thursday Congress passed a bill to undo the federal flood insurance Biggert-Waters bill that imposed sharply higher premiums for property owners across the country and Florida.
The U.S. Senate passed this corrective bill that will stop the big rate hikes faced by many primary homeowners while still stabilizing the flood insurance program for future disasters.
The legislation now heads to the White House for President Barack Obama’s approval. If Obama signs bill, the huge flood insurance rate increases that some property owners confronted in Florida will be capped at maximum of 18 percent a year.
The original Biggert-Waters bill passed in 2012 to mend a $24 billion deficit in the National Flood Insurance Program caused by recovery efforts after Hurricane Katrina and Tropical Storm Sandy. While lawmakers knew flood insurance premiums would increase, few expected the significant increases that hit when the changes took effect last October.
If it passes, the new law will ensure that primary residences built to meet current flood zone map regulations won’t be reclassified under new flood maps and won’t face much higher premiums. Primary homes will be grandfathered against future flood map changes that threatened to price out many homeowners in coastal communities and along rivers and creeks, even if they had lived their homes for decades while following previous federal guidelines.
Another critical piece of the bill passed Thursday will allow people to sell their primary homes with the lower insurance rates. That reverses the 2012 insurance reform law that required new buyers to pay dramatically higher rates with no subsidy.
Even with all the changes, House and Senate leaders say the flood insurance program will become more financially solvent because the new legislation includes a $25 surcharge on flood insurance for most primary homes and a $250 charge for businesses and second homes.