Flood Insurance: Latest Update

November 06, 2013
Author: National Association of Realtors

Flood Insurance: Latest Update
Legislation in Congress is close to the introduction of a bipartisan bill to be introduced in the US Senate, by early November. Among other important provisions, this bill would delay the implementation of rate increases for the following properties until 2 years after FEMA completes the affordability study mandated in Biggert-Waters and the Administrator of FEMA certifies that the agency has adopted sound engineering practices to accurately determine flood risk:
1. All grandfathered homes and businesses that were built to code and later remapped into a higher risk area;
2. All properties sold after July 6, 2012; and
3. All properties that purchased a new policy after July 6, 2012.
The legislation also requires FEMA to propose regulations that address the identified affordability issues within 18 months after the completion of the study and establishes a 6-month moratorium thereafter to provide for Congressional review. Affordability measures addressed under this section may include targeted assistance to individual policyholders and factor in the impacts of rate increases on overall program participation. FEMA has estimated it will take an additional 2 years to complete the affordability study before regulations can be issued and reviewed by Congress meaning rate increases would be delayed for approximately 4 years.

Also, Representative Maxine Waters has announced that the U.S. House will introduce a similar bi-partisan bill.

NAR has sent a new round of letters to every member of the Congressional delegation urging their action.