By Liz Segrist
Published March 6, 2014
The House voted 306-91 to pass the Homeowner Flood Insurance Affordability Act Tuesday night, potentially reversing some of the changes implemented from the Biggert-Waters Flood Insurance Reform Act of 2012. Biggert-Waters was enacted to reduce the National Flood Insurance Program’s estimated $30 billion debt.
|Some homeowners throughout the Lowcountry have seen flood insurance rates increases this year. The U.S. House passed legislation to address these rate hikes. |
(Photo by Liz Segrist)
The bill, H.R. 3370, repeals the provision in Biggert-Waters (.pdf) that requires homebuyers to pay the full risk rate for pre-FIRM properties at the time of purchase, which made many homes unsellable as they plummeted in value. Pre-FIRM properties are older structures built before the community’s first flood map was issued.
The bill also repeals the provision that required pre-FIRM property owners to pay the full-risk rate if they buy a new policy.
Known as the Grimm-Waters bill for its co-sponsors, Reps. Michael Grimm, R-N.Y., and Maxine Waters, D-Calif., it would cap the average annual premium increase at 15-18%. It would also refund those homeowners that have had huge rate hikes due to the sale or purchase of a home.
“Removing the point of sale provision and placing a lower cap on premium increases will allow reform to be both financially sound to taxpayers and fair to homeowners who at no fault of their own were being penalized,” Charleston Trident Association of Realtors’ 2014 President Corwyn Melette said in a statement.
The House bill will go to a conference committee to be reconciled with the Senate’s version, S. 1926, which passed in January. The Senate bill called for a four-year delay in rate hikes, giving the Federal Emergency Management Agency time to complete an affordability study.
The House bill also allows subsidies for insurance rates that are based on current flood maps. It requires FEMA, the flood program administrator, to notify communities and Congress members of remapping, as well as the mapping process and protocols.
“I decided to co-sponsor and vote for H.R. 3370 because it fixes many of the unintended consequences of the Biggert-Waters Act,” Rep. Mark Sanford said in a statement. “This bill begins the process of providing markets and people a reasonable amount of time to respond and plan for these coming changes to policies, and I believe that is what a majority of people back home need.”
Reach Liz Segrist at 843-849-3119 or @lizsegrist on Twitter.