The U.S. Senate voted 72-22 yesterday to approve the bipartisan Homeowner Flood Insurance Affordability Act with amendments made by the House. The bill curtails flood insurance rate increases that property owners are facing across the country.
“We appreciate the Senate’s swift action on the legislation, which is a responsible and balanced solution to the skyrocketing flood insurance premiums affecting residential and commercial properties that were unintentionally triggered by the Biggert-Waters reforms to the National Flood Insurance Program,” said NAR President Steve Brown in a statement.
The 2012 Biggert-Waters law set out to gradually phase out flood insurance subsidies as a way to make up for the National Flood Insurance Program’s $24 billion debt. As a result, home owners who had received federal aid to pay for flood insurance were being faced with tens of thousands of dollars a year in flood insurance hikes.
The Homeowner Flood Insurance Affordability Act repeals the Federal Emergency Management Agency’s authority to increase premium rates at time of sale or new flood map, and refunds the excessive premium to those who bought a property before FEMA warned them of the rate increase. It also limits premium increases to 18 percent annually on newer properties and 25 percent for some older ones.
Additionally, the bill adds a small assessment on policies until everyone is paying full cost for flood insurance.
“As the leading advocate for home and property owners, NAR applauds this bill for the relief and protection it will bring to businesses and families nationwide, who are experiencing financial hardship because of the extreme and sudden premium increases,” said Brown. “We believe this legislation will bring relief to property owners by ensuring a slow and steady phase in of risk-based increases.”
President Obama is expected to sign the bill into law when it arrives at the White House.