March 16, 2014

Boston Globe: Flood concerns heard by Congress

Bill caps insurance premium increases

By Jennifer Fenn Lefferts

March 16, 2014

The voices of homeowners and businesses in the state's coastal and riverfront communities who are concerned about potentially substantial increases in flood insurance were heard loud and clear by federal lawmakers who took steps last week to help keep costs down.

"My first reaction is just how proud I am of our towns, Marshfield and Scituate, for organizing to bring attention to how devastating these changes would be on the entire economy,'' said Democratic state Representative Jim Cantwell of Marshfield. "It's a very good example of average folks having their voices heard at the local, state, and national level.''

The US Senate on Thursday passed the Homeowner Flood Insurance Affordability Act, which would delay implementation of new flood maps until the Federal Emergency Management Agency completes an affordability study, and would put caps to protect homeowners against sudden steep increases in premiums. The plan had been approved earlier by the House of Representatives and will now go to President Obama.


In addition to delaying the maps, the legislation also includes a provision advocated by US Senator Elizabeth Warren that would compensate homeowners when they successfully appeal their placement into a flood zone.

The legislation would also limit yearly premium increases to an average of 15 percent per year for each of the nine property categories listed by FEMA, and stipulates that no individual policyholder would have to pay an increase of more than 18 percent per year.

It calls on FEMA to strive to reach the goal of most policyholders having a premium of no more than 1 percent of the value of their coverage. The bill also reinstates the flood insurance program's grandfathering provision so that homes that complied with previous flood maps would not be hit with large increases when new maps show a greater risk of flooding. It also eliminates a provision that required an immediate hike to actuarial levels when ownership of a home changes. The changes in this legislation would be paid for primarily by a $25 surcharge on residential properties and $250 for nonresidential properties or nonprimary residences.


"I am deeply relieved that the Senate has now passed this important legislation to protect families here in Massachusetts and across the country from unaffordable and unexpected flood insurance rate hikes," Warren said in a prepared statement. The bill would "require FEMA to ensure its maps are up to date, reliable, and reflect the best available scientific data, and will make sure that families who played by the rules can afford to stay in their homes."

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