Flood Insurance Rate Hike Delayed
According to Insurancejournal.com, a select group of Senate and House members has reached a bipartisan agreement to delay changes to the federal flood insurance program that was raising premiums for many homeowners and paralyzing real estate transactions in some of the high risk areas. The new legislation calls for a 4-year delay for most rate increases and requires FEMA, the administrator for the program, to complete an affordability study and propose regulations that will address affordability issues.
“The proposed delay affects: primary, non-repetitive loss residences that are currently grandfathered; all properties sold after July 6, 2012; and all properties that purchased a new policy after July 6, 2012.”
The Biggert-Waters law was originally intended to diminish the debt of the National Flood Insurance Program, estimated at more than $25 billion, by bringing rates more in line with the risk and losses incurred in certain flood-prone areas. The “unintended consequences,” according to Representative Maxine Waters, D-California who co-authored the bill, have been shockingly high flood insurance premiums for many homeowners, new requirements to purchase flood insurance for others and a stalled real estate market in some of the high risk areas.
