U. S. House to Consider Bill Halting Flood Insurance Rate Increases

A modified version of the “The Homeowner Flood Insurance Affordability Act,” H.R. 3370, has been introduced in the U.S. House to ensure that flood insurance rate increases do not adversely impact local communities and to promote the solvency of the National Flood Insurance Program. 

This legislation is in response to major flood insurance rate increases resulting from the 2012 Biggert-Waters Act. Cities with properties experiencing these rate increases should contact their congressmen to ask for their support of this bill. Read how Biggert-Waters is affecting SC cities.

This updated version of H.R. 3370 is expected to be considered by the full House later this week under a “suspension of the rules” which means it will need a 2/3 majority (287 in favor) to pass. Using this procedure also means the legislation is not subject to amendments. 

Assuming the House bill does pass, it will need to be reconciled through a conference committee with S. 1926 that the Senate passed earlier this year. Senators Graham and Scott voted in favor of the Senate bill. The Senate measure calls for a four year delay in the rate increases pending the completion of the affordability study. 

A summary of the modified House bill is below:

·   Reinstates the grandfathering of properties by repealing Section 207 of the Biggert-Waters Act. This means that all post Flood Insurance Rate Map properties built to code at the time of construction will have protection from rate spikes due to new mapping. By reinstating the grandfathering of properties, there is no longer a need to delay the rate increases. 

·  Prevents FEMA from increasing premiums within a single property class beyond 15 percent per year.

·  Requires a 5 percent minimum annual increase on pre-FIRM primary residence policies that are not at full risk.

·  Refunds policyholders who purchased pre-FIRM homes after Biggert-Waters (7.6.12) and were subsequently charged higher rates.

·  Removes the rate increase trigger for properties sold after 7.6.2012 and treats the new property owner as the same as the previous property owner.

·  Applies an annual surcharge of $25 for primary residences and $250 for second homes and businesses to all policies. All revenue from these assessments would be placed in the NFIP reserve fund which was established to ensure funds are available for meeting the expected future obligations of the NFIP.

·  Funds the affordability study required by Biggert-Waters Act and mandates its completion in two years.

·  Requires FEMA to reimburse policy holders and communities for successful map appeals.