Senate Passes Flood Insurance Bill to Delay Rate Hikes

Congress Tries to Fix Problem It Created Last week, the Senate passed a measure that delays higher federal flood insurance premiums for homes and businesses located in coastal and flood-prone areas. The Homeowner Flood Insurance Affordability Act, S. 1926, delays dramatic National Flood Insurance Program (NFIP) premium increases for four years, until the Federal Emergency Management Agency (FEMA) has an opportunity to complete the flood map affordability study mandated in a law Congress passed in 2012—the Biggert-Waters Flood Insurance Reform Act. This vote came as a result of Congress passing a law without considering its consequences. Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 to address the financial stability of the NFIP, which is $24 billion in debt as a result of claims stemming from Hurricanes Katarina and Sandy. That law sought to increase flood insurance premiums for homes and businesses located in flood plains and update FEMA flood plain maps. However, Congress did not anticipate how dramatically premiums would rise – many homeowners and business owners have seen premiums increase by more than 10 times their previous rate in less than one year. A provision in the fiscal year 2014 omnibus appropriations law already postpones some of the premium increases until Oct. 1, 2014. Again, the Senate bill and a similar one in the House—H.R. 3370—would delay the rate hikes for four years and allow FEMA to update its flood maps. The House bill has over 180 cosponsors and the House leadership has indicated that it may be willing to bring the legislation for a vote this year. For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org