Congress passes flood insurance legislation
March 14, 2014
Senator John Hoeven today announced that the U.S. Senate has passed a bill that will hold the line on flood insurance premium costs for homeowners and businesses. The measure also includes the Hoeven-Heitkamp-Cramer basement exception, which enables homeowners to receive credit for flood proofed basements when determining flood insurance rates. The legislation now goes to the president's desk.
The bill prevents the Federal Emergency Management Agency (FEMA) from steeply raising rates and keeps the cost of premiums affordable for homeowners and business. Also like the Senate bill, the House requires FEMA to conduct an affordability study and report to Congress within 18 months.
"The bill we passed today achieves the important task of making sure flood insurance remains affordable and accessible to those who need it," Hoeven said. "Importantly, it also gives homeowners, businesses and communities the time they need to implement flood prevention measures that will help to keep their rates affordable in the future. With the inclusion of our amendment, the bill also makes sure people get credit for the work they've already done to protect their basements."
Key provisions of the legislation Congress passed today are as follows:
Reinstates grandfathered rates. Removal of this provision ensures that policyholders are not penalized who built to code and to standards of existing Flood Insurance Rate Maps.
Removes home sale/new policy rate-increase trigger for homes and businesses.
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Caps premium increases to ensure that the federally run insurance program cannot raise premiums on individual properties by more than 18 percent annually. The increase would be based on the historical premium rates rather than the recent increased rates, which is completely different than the way FEMA has implemented Biggert-Waters.
Authorizes annual surcharge of $25 for primary residences and $250 for second homes and businesses to help pay for the program. F