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On March 4th, the House passed H.R. 3370, the Homeowner Flood Insurance Affordability Act.

I've pasted the highlights of the House version of the bill below and attached related docs to this post including a letter from Rep Brooks highlighting the points of the legislation and thanking people like us for our input on the issue.  Now it's back to the senate to see what they come up with (or if they just go with this version).

Provides Greater Consumer Affordability & Predictability:

  • Permanently removes the home sale/new policy rate increase trigger for primary residences. So the person buying the home is treated the same as the person selling it. Removal of these provisions would restore real estate markets in communities across the country.
  • Reinstates grandfathered rates by decoupling rate increases with FEMA remapping. Removal of this provision ensures that policyholders are not penalized who built to code and built to standards of existing Flood Insurance Rate Maps.
  • Provides a refund for the people who purchased a Pre-FIRM subsidized home without the full transparency from FEMA on the new BW-12 rate structure, which wasn’t made public for a year after BW-12 was signed into law.
  • Provides home improvement protection by increasing the threshold that triggers a loss of Pre-FIRM status for homes substantially damaged/rebuilt from exceeding 30% of the fair market value to 50% (which was the threshold prior to BW-12).
  • Would include generally accepted affordability measures such as: high deductible options, flood-proofed basement exemptions, map certification, flood protection funding recognition, optional monthly installment plans, exceptions on escrow requirements, removing the funding cap on the affordability study, etc.

Ensuring Greater Fiscal Solvency of NFIP:

  • Authorizes a small assessment around $25 per year on primary residence polices in the NFIP and around $250 per year on business/non-primary residence policies in the NFIP. All revenue from the assessments would be placed in the NFIP reserve fund (created by BW-12), which could be used to transfer catastrophic flood risk to the private market. The assessment benefits all policyholders by building up the NFIP reserve fund. Currently, the reserve fund balance is inadequate to handle future storms like Hurricanes Katrina and Sandy. The assessment would phase-out as premium rates match projected loss.

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Thanks for posting this. It sounds like senate could approve this quickly as well.

My policy ends at the end of the month so this can't come soon enough!

Hello,  I've read the bill ... it's my understanding the bill simply limits annual increases to no more than 15%-18% per year ... and that we'll be moved to market-based rates over time ... (that's why the press and press release say it "mitigates rate shock.")  The premium increases will still come year over year ... Does anyone else who read the bill also have this same understanding?  Also, there is a provision that indicates the FEMA administrator shall seek to limit annual premiums to no more that 1% of the home price (e.g., $3,000 per year on a $300,000 house) but there is nothing that limits with certainty annual premiums to that level ...   

My read of the bill is similar. I think what would make a real difference for our area in the long run is Section 19 which deals with flood protection systems. I wonder if the current status of the Corps flood control project would meet the requirements outlined there. If so, how long would it take for the flood risk maps to be revised accordingly and our flood risk status re-assessed?
Just received this e-mail from Senator Donnelly:

"Earlier today, the Senate passed the House-passed version of flood insurance reform by a bipartisan vote of 72 to 22, with my support. The Flood Insurance Affordability Act protects Hoosier homeowners who have experienced sudden and dramatic flood insurance premium rate increases. The bill limits certain premium increases enacted by the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters, P.L. 112-141), and "grandfathers" rates for homeowners whose premiums were increased as a result of remapping required by Biggert-Waters. Additionally, the bill includes provisions that require the Federal Emergency Management Agency to conduct an affordability study and ensure that homeowners get credit for flood mitigation efforts.

I am pleased that both the House and the Senate worked together on this bipartisan legislation to protect homeowners from dramatic rate increases, while providing for the financial stability of the National Flood Insurance Program so that it may continue assisting families that fall victim to flood damage. The bill has been sent to the President for his signature and should you have any questions concerning the Flood Insurance Affordability Act, please do not hesitate to contact me."
I received the same email yesterday so now we just need to get the levee done!


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