Senate Passes Fix For Flood Insurance Debacle, Obama To Sign Measure Shortly… Finally!
After over a year of political ineptitude marked by brief spurts of total paralysis, the U.S. Senate has finally passed legislation to turn back wildly escalating flood insurance premiums, and stem the economic damage inflicted on the real estate industry here in the Tampa – St. Petersburg area and across Florida and the U. S.
The bi-partisan measure effectively overturns many of the onerous effects created by passage of the 2012 Biggert-Waters Bill, which removed federal flood insurance premium subsidies resulting in rate increases of as much as 700-800 percent, deflated property values and put a damper on a recovering real estate market.
Key Impacts Of New Legislation To Turn Back Escalating Flood Insurance Premiums:
- Annual rate increases capped at 18 percent.
- Owners can again sell primary residences with lower rates intact. This overturns the requirement that buyers of even primary residences immediately begin paying unsubsidized rates.
- Owners of primary residences who paid the higher full-risk premiums will receive rebates and their rates will be rolled back.
- Buyers of second homes will still be required to pay unsubsidized full-risk rates.
- Buyers of commercial properties subject to flooding will also be required to pay unsubsidized full-risk rates.
- Imposes an annual assessment of $25 on primary home policies, while second home and business owners will be assessed $250. The assessments will be used to decrease the program’s insolvency.
- Helps stem the tide of cancelled flood insurance policies and abandoned homes, and provides relief to owners who have been unable to sell their low-lying properties due to escalating premiums.
A Fix for Escalating Flood Insurance Premiums, But, Not The End…
While the new legislation promises to provide immediate relief from the fallout of Biggert-Waters, it will remain an issue. Flood insurance rates will continue to rise, and it would be naïve to believe that future natural disasters will not put the solvency of the program in jeopardy.
Worth watching is a Washington watchdog group, Taxpayers for Common Sense, which believes that the higher Biggert-Waters rates were warranted and that flood insurance subsidies should be ended.
Keep your ears to the ground, and your eyes on our blogs for any new developments.