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House to Vote This Week on a Flood Bill

The U.S. House of Representatives will move to consider a bill this week to revise key components of the Biggert-Waters Flood Insurance Reform Act of 2012...
February 27, 2014

The U.S. House of Representatives will move to consider a bill this week to revise key components of the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12). While the Senate chose to simply delay the reforms by four years, the House bill would essentially eliminate most of them. Key aspects of the House bill:

  • Fully restores the grandfathering of properties, including when they are resold by the current owner. The measure also rolls back full-risk rates increases for properties that have been resold since the law was passed in mid-2012.
  • Eliminates requirement that policyholders buy coverage for detached buildings such as sheds and garages.
  • To help pay for the changes, the bill calls for charging every flood policy a surcharge; $25 on residential properties, and $250 on businesses and second homes.
  • Includes a section on the authority of states to regulate private flood insurance.
  • The bill does not repeal the Biggert-Waters provision mandating that those with a second home in a flood zone and those with properties that have repeatedly been flooded will continue to have their premiums go up by 25% a year until they reach actuarial rates.

The pending action in the House this week follows the January 30 passage in the Senate of the Homeowner Flood Insurance Affordability Act of 2014 (S. 1926), which would effectively delay for up to four years flood-insurance rate hikes imposed by the Biggert-Waters Flood Insurance Reform Act of 2012. The House bill, unveiled Feb. 21, goes even farther than the Senate bill.

What It Means to Agents: PIA strongly supports the National Flood Insurance Program (NFIP) because it offers critical support to those affected by floods and provides the coverage that the private market is unable to insure. PIA supports the ongoing implementation of BW-12, along with risk-based rates that take consumer affordability into consideration. In light of the significant financial hardship for some policyholders who have seen drastic rate increases, PIA supports and strongly advocates for specific mitigation-related solutions that could lead to affordable premiums. PIA remains concerned that delaying actuarially sound rates, while providing much-needed relief for many homeowners, does not address the long-term problem.

House NFIP Rate Delay Gaining Support
(National Underwriter 2/24/14)
Policy Over Politics on Flood (National Underwriter 2/24/14)

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