Florida homeowners may get relief from flood insurance premium hikes after all. As we discussed a few weeks ago (start with our Sept. 24 post), the rate increases called for by the 2012 Biggert-Waters Flood Insurance Reform Act took homeowners and lawmakers by surprise. We all expected the increases to take effect Oct. 1, but, just as no one expects the Spanish Inquisition, no one expected rates to increase tenfold.
Congress has heard the cries for help and is now considering a bill that will postpone the rate hikes for another four years. In that time, the Federal Emergency Management Agency will complete the affordability study called for by the Biggert-Waters Act. Critics had pointed out that one of the bill’s major disconnects was that the rate increase would go into effect before the study was done.
The bill has bipartisan support, a rare thing these days, it seems. And, according to a spokesman for Florida Sen. Bill Nelson, the bill should pass quickly. As with most things, though, not everyone supports the rate rollback.
The idea behind the Biggert-Waters act was to bring flood insurance rates into line with the true risk of flood damage to property. High-risk areas along the coasts and along the nation’s rivers would be rated higher than lower-risk locations. Older houses that lack modern structural safeguards against flood damage would also pay more, because, again, they are at greater risk of damage or destruction in a flood.
Calculating the new rates wasn’t just a math problem for FEMA, though. We’ll get into the rating process a little more in our next post.
Source: Reuters, “Bipartisan deal in Congress to delay flood insurance hike: sources,” David Adams, Oct. 28, 2013Share