Schumer Announces Senate Passage of Critical Flood Insurance Premium-Relief Bill, Urges House to Follow Suit
By Long Island News & PR Published: January 31 2014
Bill Puts A Moratorium On Extreme Rate Hikes That Would Affect Tens of Thousands of New Yorkers.
Washington, DC - January 30, 2014 - U.S. Senator Charles E. Schumer today announced the Senate has passed bipartisan legislation, sponsored by Schumer, that will protect tens of thousands of New York homeowners from facing huge flood insurance premium rate hikes, or having their property values decimated when they try to sell. An overwhelming bipartisan majority of 67-32 in the Senate voted for the legislation. The bill, the Homeowner Flood Insurance Affordability Act, requires the Federal Emergency Management Agency (FEMA) to complete an affordability study and propose real solutions to address flood insurance affordability issues before flood insurance premiums can be raised. The FEMA study will help ensure that flood insurance is accurate and affordable so that people are not forced to choose between breaking the bank and leaving the neighborhood they call home. Schumer said that the legislation will help protect many homeowners from increased flood insurance rates that were set to be imposed by the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters) prior to completion of the affordability study mandated by the law.The legislation now moves to the House of Representatives for final passage, and Schumer is urging his colleagues in the House to follow suit and pass the bill.
"The passage of the Homeowner Flood Insurance Affordability Act in the Senate is an important step in the fight to prevent tens of thousands of New Yorkers from facing crippling flood insurance premium increases and loss of property value," said Schumer. "New Yorkers are still recovering from the destructive force of Superstorm Sandy and back-to-back years of extreme weather and flooding, and this bill prevents for many the injustice that these homeowners were going to face – increased flood insurance premiums that can break the bank. The bottom line is that FEMA must do the required affordability study first. It makes no sense to raise flood insurance rates before we consider how homeowners will be able to afford to pay them, so I am urging my colleagues in the House to quickly follow suit and pass this bill."
The Homeowner Flood Insurance Affordability Act was introduced by Sen. Bob Menendez (D-NJ), and is co-sponsored by Senator Chuck Schumer (D-NY), Senator Mary Landrieu (D-LA), Senator Johnny Isakson (R-GA) and 25 other Senators. Supporters of the delay in the House, including cosponsor Rep. Michael Grimm (R-Staten Island), voted 281-146 last year on an amendment to postpone premium increases, but the House is still required to vote on the bill that passed the Senate today. Schumer explained that the vote in the House last year was evidence that there was a good base of support for delaying flood insurance rate hikes, but that he would be urging his colleagues in the House to pass the comprehensive Senate bill as quickly as possible.
Specifically, the Homeowner Flood Insurance Affordability Act would delay the implementation of rate hikes imposed by Biggert-Waters for three categories of property owners:
Homeowners who have "Pre-FIRM subsidized" policies and will see their property values decline drastically when they go to sell their properties, because the buyers will be forced to pay higher rates immediately. These are properties that were built before the implementation of their area's first flood map and were permitted to pay a special low rate.
Homeowners whose rates were "grandfathered in" and will face phased-in higher premiums when their community is remapped by FEMA. Grandfathered policies are those where the property was originally built to code and complied with existing flood maps, but are in a community that has since had their flood risk revised upwards. These homeowners were previously able to keep their previous rates.
Homeowners who purchase a new policy after Biggert-Waters was instituted on July 6, 2012.
The legislation delays the implementation of rate increases on the three types of properties until FEMA meets two requirements: 1) it completes the affordability study mandated by the 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. FEMA has estimated it will take at least two years to complete the affordability study before a draft regulatory framework can be provided to Congress.
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