October 29, 2013

Members of Massachusetts Delegation Join Bipartisan Coalition, Introduce Bill to Protect Homeowners From Flood Insurance Rate Spike

Homeowner Flood Insurance Affordability Act Introduced Today by Bipartisan Coalition

WASHINGTON, DC - United States Senators Elizabeth Warren and Edward J. Markey, and Representatives John Tierney (MA-6), Stephen Lynch (MA-8), Niki Tsongas (MA-3) and William Keating (MA-9) today joined a bipartisan coalition of members to introduce the Homeowner Flood Insurance Affordability Act, which will protect millions of homeowners from facing huge flood insurance premium rate hikes and require the Federal Emergency Management Agency (FEMA) to complete an affordability study and propose real solutions to address affordability issues before any flood insurance premiums can be raised in the future. The bill includes a provision to compensate homeowners who successfully appeal their inclusion in new flood maps and are granted new elevation certificates, which Senator Warren advocated at a recent Banking Committee hearing with FEMA.

"Families shouldn't be slammed by unexpected and unaffordable rate hikes while FEMA is still trying to figure out if its maps are accurate," said Senator Warren. "I'm pleased to join colleagues on both sides of the aisle to call for a commonsense, one-year delay, which will give FEMA time to complete an affordability study and properly implement the new rates. This legislation will help families in Massachusetts and across the country."

One year ago today, Superstorm Sandy destroyed homes and businesses along the Atlantic coast," said Senator Markey. "But the costs of stronger storms and more frequent flooding should not be borne by those that are least able to afford it, including innocent business and homeowners in Massachusetts. When I met with community members in the North and South Shore, I heard grave concerns that rate increases could mean the loss of homes and the shuttering of businesses. This bipartisan legislation will ensure that we have addressed the affordability of the flood insurance rate increases before any crippling flood insurance rate increases go into effect. I thank my colleagues, especially Senators Menendez, Isakson, Landrieu and Merkley, for their leadership on this issue."

"What I'm hearing from homeowners and businesses in my district about exorbitant increases in flood insurance premiums and rates is extremely concerning," said Congressman Tierney. "More than 3,000 residents in Essex County alone have been affected. This commonsense legislation will provide relief to these homeowners by delaying rate hikes while Congress awaits an affordability study that was intended to be completed before these staggering rate increases took effect. I look forward to continuing to work with my colleagues in the Massachusetts delegation to help my constituents by addressing the affordability concerns that have arisen from the new flood maps."

"As a member of the Natural Resources Committee, and with several major rivers and waterways crisscrossing the Third District, I have long been an advocate for not only preserving these natural resources but also supporting those who live and work around them," said Congresswoman Tsongas. "I have heard from concerned residents in the region and I urge action to help maintain affordable flood insurance."

"Many residents in our district have been living in coastal communities for generations," said Congressman Keating, who helped craft the legislation. "The rate hikes under the NFIP would propose such a hardship that many would potentially need to move. The legislation introduced today is an important step towards making flood insurance comprehensive while remaining affordable. As someone who lives and works in a community affected by these rate hikes, I understand the concern and need for immediate action. I am glad that Members from both parties in both the House and Senate are able to agree and fix this problem before it is too late, and I urge swift passage by both chambers."

As maps are updated, many families in Massachusetts and across the country have been placed into a flood zone for the first time, and are being asked to pay thousands of dollars in premiums under new flood insurance rate rules. Senators Warren and Markey signed a bipartisan letter earlier this month calling for a one-year delay of the new rates. The Massachusetts Congressional delegation has also sent a letter to Senate and House of Representatives leadership calling for a delay.

Representatives Tierney, Lynch, Tsongas and Keating joined over fifty of their colleagues to introduce a companion bill in the House of Representatives. The bill introduced in the Senate was led by Senators Robert Menendez (D-NJ) and Johnny Isakson (R-GA); additional co-sponsors include Senators Mary Landrieu (D-AR), David Vitter (R-LA), Chuck Schumer (D-NY), Jeff Merkley (D-OR), John Hoeven (R-ND), Al Franken (D-MN) and Heidi Heitkamp (D-ND). 

The "Homeowner Flood Insurance Affordability Act" will:


Delays the implementation of rate increases on the following three types of properties until FEMA meets two requirements:  1) completes the affordability study mandated by Biggert-Waters Flood Insurance Reform Act of 2012, proposes a draft affordability framework for Congressional review, and Congress has a chance to give FEMA affordability authority; and  2) the FEMA Administrator certifies that the agency has implemented a flood mapping approach that utilizes sound scientific and engineering methodologies to determine varying levels of flood risk in all areas participating in the National Flood Insurance Program:

1.   All homes and businesses that are currently "grandfathered."  These are properties that were built to code and later remapped into a higher risk area.  Prior to Biggert-Waters, these policyholders were not penalized for relying on inaccurate FEMA flood maps.

2.   All properties that purchased a new policy after July 6, 2012, before they were legally required to purchase insurance.

3.   All properties sold after July 6, 2012.  New homeowners and business owners will continue to receive the same treatment as the previous owner unless they trigger another provision in Biggert-Waters such as Severe Repetitive Loss, non-primary residence, substantial damage, etc.

The measure requires FEMA to propose a draft regulatory framework to address any affordability issues identified by the study within 18 months after the completion of the study and establishes a six month period thereafter to provide for Congressional review.  The House and Senate would then hold up or down votes through a privileged motion on giving FEMA the authority to promulgate affordability regulations.  If Congress approves this authority, the targeted freeze set forth by this bill would continue until regulations are finalized.  If not, the freezes would be lifted absent other Congressional action.


Section 100236 of Biggert-Waters required FEMA to produce a study that considered the effects the Bill will have on affordability.  Strikes the arbitrary dollar amount on the affordability study to ensure FEMA has the funding required to complete it within two years of the date of enactment.


Allows FEMA to utilize the National Flood Insurance Fund (NFIF)  to reimburse policyholders who successfully appeal a map determination.  FEMA currently has the authority to reimburse homeowners for successful appeals of map findings, but Congress has never appropriated funding for this purpose.  Making appeal reimbursement an eligible expense of the NFIF would give FEMA the incentive to "get it right the first time" and repay homeowners for contributing to the flood risk body of knowledge.  Unsuccessful appeals would not be reimbursed in any way.


FEMA's AR and A99 flood zone categories provide more affordable flood insurance to qualifying communities that are in the process of levee construction, reconstruction, and improvements.  Current regulations require a certain level of federal participation to qualify for either an A99 or an AR designation, and therefore prevent FEMA from giving communities fair credit for improvements made to existing flood control systems.  Proactive communities that invest in mitigation should not be penalized for self-financing flood protection projects. 


Preserves the pre-Biggert-Waters basement exception allowing the lowest flood-proofed opening in a home to be used for determining flood insurance rates.  This affects 54 communities nation-wide where basements are necessary to protect homeowners and businesses from extreme weather.  Basements that have not been flood-proofed would remain subject to the effects of Biggert-Waters


Establishes a Flood Insurance Rate Map Advocate within FEMA to answer current and prospective policyholder questions about the flood mapping process.  The Rate Map Advocate will be responsible for educating policyholders about their individual flood risks, their options in choosing a policy, assisting property owners through the map appeals process, and improve outreach and coordination with local officials, community leaders, and Congress.

Homeowners with mortgages living in flood zones are required to have flood insurance, which for about 20 percent of properties has traditionally been subsidized or grandfathered at a lower rate by the National Flood Insurance Program (NFIP). Before Superstorm Sandy struck, a federal flood insurance reform bill, the Biggert-Waters Act, was passed as part of a larger legislative package. The Biggert-Waters Act was aimed at reducing, or phasing out, the federal NFIP subsidy at up to 25 percent a year, which would dramatically increase premiums for homeowners and businesses.