Wednesday, October 30, 2013
Flood Insurance Legislation Would Provide Premium Relief for Home Owners
At your HBA’s urging, the House and Senate on Oct. 29 introduced identical flood insurance legislation that would provide relief from soaring flood insurance premium rates for countless home owners across the nation, prevent undue hardship on the recovering housing market, stop home values from dropping and make the National Flood Insurance Program stronger and more effective for years to come.
Championed in the Senate by Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.) and in the House by Reps. Michael Grimm (R-N.Y.) and Financial Services Committee Ranking Member Maxine Waters (D-Calif.), the Homeowner Flood Insurance Affordability Act offers a common-sense solution to fix some of the costly and unintended consequences resulting from the implementation of the Biggert-Waters Flood Insurance Reform Act.
The legislation would prevent premium rate hikes from taking effect for four years, which will give the Federal Emergency Management Agency (FEMA) time to conduct an affordability study and to reimburse those who can prove that its existing flood plain maps are inaccurate. The measure also requires FEMA to adopt sound engineering practices to accurately determine flood risk.
Though the Homeowner Flood Insurance Affordability Act will address many of the concerns NAHB members had with the Biggert-Waters Flood Insurance Reform Act, NAHB is disappointed that this legislation does not address the treatment of non-primary residences and an issue of importance to remodelers.
The “substantial improvement” threshold – or the value of remodeling and renovation projects that cause the insurance premium rate increases to kick in – was lowered from 50% to 30% in the Biggert Waters Flood Insurance Reform Act. This lower threshold – which was unchanged in the newly unveiled House and Senate legislation -- is a potential disincentive for home owners who are considering hiring a professional remodeler to make improvements to their properties.
In addition to Menendez and Isakson, original cosponsors of the Senate bill include Sens. Thad Cochran (R-Miss.), Heidi Heitkamp (D-N.D.), John Hoeven (R-N.D.), Mary Landrieu (D-La.), Jeff Merkley (D-Ore.), and David Vitter (R-La.). Other cosponsors of the House bill include Reps. Bill Cassidy (R-La.) and Cedric Richmond (D-La.).