In January, the U.S. Senate overwhelmingly passed the Homeowner Flood Insurance Affordability Act on a vote of 86-13. This will postpone the implementation of the Biggert-Waters Insurance Reform Act of 2012, which is intended to boost insurance premiums based on a property’s risk of flood, for four years.
Congress passed the Insurance Reform Act in 2012, which began rising taxes in high-risk areas in October 2013. The increased premiums would force people living in flood-prone areas.
Opponents of the bill argue that it will force taxpayers to cover the cost of insurance for homes in high-risk areas, while proponents of the bill say that increased premiums may force some Americans into selling their homes.
“This issue isn’t just about insurance rate tables and actuarial risk rates – fundamentally it’s all about people,” Senator Robert Menendez of New Jersey, a chief sponsor of the bill, told Reuters.
The Insurance Reform Act was passed with strong bipartisan support in an effort to end the $24 billion deficit in the National Flood Insurance Program largely caused by Hurricane Katrina in 2005. However, shortly after the bill passed, Superstorm Sandy hit the northeastern coast and a flood of new insurance claims mounted. The Homeowner Flood Insurance Affordability Act is intended to give the Federal Emergency Management Agency enough time to re-evaluate its maps of high-risk flood areas and finish an affordability study.
A new version of the Homeowner Flood Insurance Affordability Act is a bipartisan effort that has received 228 sponsors, which is 10 more than needed to pass. Although the bill has easily gotten through the Senate, the House blocked the Act three times in February. Changes are expected to protect taxpayers and home owners.
The bill is backed by several groups, including the American Bankers Association, the National Association of Homebuilders and the National Association of Realtors®.