March 28, 2014

Boston Globe Op-Ed: Help for homeowners

Homeowners across Massachusetts received some good news last week: President Barack Obama signed into law the bipartisan Homeowner Flood Insurance Affordability Act, which will help protect millions of families here in the Commonwealth and across the country from huge increases in flood insurance rates.

A few years ago, Congress changed the national flood program to move toward a more market-based system that more accurately reflects the true costs and risks of flood damage. This was a well-intentioned law, but unfortunately homeowners were blindsided by a double hit: significant rate increases and new flood zone maps that may not be accurate.

That's why I believed it was critical to reform rate increases and to rework the flood maps to ensure that they are up to date, reliable, and reflect the best available scientific data.

We need to make sure that hardworking families who played by the rules can afford their flood insurance policies. But under the new flood maps, homeowners faced flood insurance premium increases that can cost $500, $1,000, or much, much more per month. Most hard working families and seniors don't have that kind of extra money on hand to spend on flood insurance premiums that they never knew they needed.

One Massachusetts resident wrote to me, "I have owned my property for over 33 years. Twelve years ago I built a house according to the codes at the time. Recently the flood maps were redrawn putting my home in a new flood zone and out of compliance. The implementation of the Biggert-Waters Act is going to raise our flood insurance to $10,000 or more per year. I followed the rules, and now the rules are changing leaving me few options to comply." This isn't right.

The Homeowner Flood Insurance Affordability Act will help homeowners across Massachusetts by delaying implementation of the new flood rates until FEMA completes an affordability study and provides a plan to lessen the impact of these unacceptable rate increases. It will protect homeowners by limiting yearly premium increases to an average of 15 percent per year, and says that no individual policyholder will pay an increase of more than 18 percent per year. The legislation calls on FEMA to strive to reach the goal of most policyholders having a premium of no more than one 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, and eliminates a provision that required an immediate hike to actuarial levels when ownership of a home changes.

Additionally, the Homeowner Flood Insurance Affordability Act provides the government with the time it needs to make sure the new flood maps are accurate, reliable, and based on good science. It's critical that these maps are accurate, but concerns are growing by the day. A recent independent review conducted by coastal scientists at the request of Congressman Bill Keating concluded that FEMA used outdated wave methodology better suited for the Pacific coast when they drafted the new flood maps for Massachusetts. These scientists believe this resulted in FEMA over-predicting the flooding that could occur from once-in-a-century storms for much of our state.

Despite these very real concerns about inaccurate flood maps, I heard from a constituent who lives in Brockton who was informed that if she wanted to appeal the new maps, she would have to pay more than $1,000 for an engineer to come and conduct an elevation study of a nearby brook. She has to spend this money even though the City of Brockton and the Army Corps of Engineers have no record of the brook ever overflowing. And if her appeal is successful, she's still out a thousand dollars due to FEMA's mistake.

FEMA has a lot of work to do, and in the meantime, families shouldn't be hit with high costs when they challenge the flood maps and win their appeals. That's why I urged my colleagues to include a provision in the Homeowner Flood Insurance Affordability Act that will help address this injustice and will allow FEMA to utilize the National Flood Insurance Fund to reimburse people who successfully appeal a map determination. It also gives FEMA the added financial incentive to get the maps right the first time.

The entire Massachusetts congressional delegation worked hard on this legislation, and ultimately senators and representatives on both sides of the aisle joined together to pass this commonsense delay. This is an issue of basic fairness, and this law will help provide much-needed relief to homeowners in Massachusetts and around the nation.

Read the op-ed online at the Boston Globe website here

By:  Senator Elizabeth Warren
Source: Boston Globe