Flood Insurance Update
Recieved this update today and thought it was critical to share some of the good news.
There has been a great deal of movement in Congress. Working with Karl Eckhart at NAR and John Sebree at Florida Realtors®, here is what we know.
Legislation in Congress is finally close to introduction. We expect a bipartisan bill to be introduced in the US Senate tomorrow. Among other important provisions, this bill would delay the implementation of rate increases for the following properties until 2 years after FEMA completes the affordability study mandated in Biggert-Waters and the Administrator of FEMA certifies that the agency has adopted sound engineering practices to accurately determine flood risk:
All grandfathered homes and businesses that were built to code and later remapped into a higher risk area;
All properties sold after July 6, 2012; and
All properties that purchased a new policy after July 6, 2012.
The legislation also requires FEMA to propose regulations that address the identified affordability issues within 18 months after the completion of the study and establishes a 6-month moratorium thereafter to provide for Congressional review. Affordability measures addressed under this section may include targeted assistance to individual policyholders and factor in the impacts of rate increases on overall program participation. FEMA has estimated it will take an additional 2 years to complete the affordability study before regulations can be issued and reviewed by Congress meaning rate increases would be delayed for approximately 4 years.
Also, Representative Maxine Waters has announced that the U.S. House will introduce a similar bi-partisan bill this week. You can read more about Representative Waters intentions here.
As indicated last week, we have sent a new round of letters to every member of the Congressional delegation urging their action. Just today we have followed-up with Senators Nelson and Rubio specifically urging them to sign on to this new bill. Obviously, this legislation still has a long road ahead but it is progress.
There has been an article from an insurance journal circulating this morning that states a "Bipartisan Deal has been Reached to Delay Flood Insurance Premium Hikes." While there has been significant progress, as indicated above, the legislation has not yet been introduced. It could be a month or more before Congress takes final action on this legislation. Again, this is positive movement but please know this legislation just has a long way to go before it reaches the president for his signature.
David B. Bennett, CAE
President & CEO
Pinellas REALTOR® Organization