Washington, DC – The U.S. Senate today approved legislation by a vote of 72-22 to spare many homeowners from sharp rate hikes in federal flood insurance policies. The bill will put a cap on future rate hikes and provides refunds for certain homeowners who bought property after July 6, 2012 when steep rate hikes went into effect.
The bill, the Homeowner Flood Insurance Affordability Act, was passed in response to concerns about the Biggert-Waters Flood Insurance Reform Act of 2012. Biggert-Waters was enacted to prevent the National Flood Insurance Program (NFIP) from lapsing, and it required FEMA to develop new rates for flood insurance premiums that more accurately reflect flood risk. The law also required FEMA to conduct an affordability study to address cost concerns, but FEMA was not able to finish it before the new rates went into effect. As a result, thousands of Rhode Islanders were set to face flood insurance rate hikes. The bill passed today holds down rates for struggling homeowners, including many who own property that was built before Flood Insurance Rate Maps were created, and some who were mapped into a higher risk zone.
“This bill will provide relief to many Rhode Island homeowners facing sharp rate increases in their flood insurance policies,” said U.S. Senator Sheldon Whitehouse. “We must ultimately look for a path forward that puts the federal flood insurance program on solid financial footing, implements rates that reflect actual risk to properties, and does not put too much of a burden on homeowners. This bill establishes a process through which we can work toward that goal, and I’m glad we were able to pass it in bipartisan fashion.”
More than 5.5 million people currently hold flood insurance policies in more than 21,800 communities across the country. According to a report by the Rhode Island Emergency Management Agency (RIEMA), there are currently more than 16,000 NFIP issued policies in Rhode Island.
The bill passed today also included an amendment by Senator Whitehouse to cut through red tape and burdensome costs that can hamper habitat restoration projects, like the Upper Pawcatuck River restoration projects in Rhode Island. The bill now goes on to President Obama for his signature.