Coalition for Sustainable Flood Insurance Commends House for Passing Milestone Flood Insurance Measure
New Orleans, LA – Today, Greater New Orleans, Inc. President and CEO Michael Hecht, on behalf of the Coalition for Sustainable Flood Insurance, commended the House for passage of the Homeowner Flood Insurance Affordability Act. The legislation now goes to the Senate for final approval.
“The House’s passage of the Homeowner Flood Insurance Affordability Act today is a milestone for our national coalition,” said Michael Hecht, President and CEO of Greater New Orleans, Inc. on behalf of the Coalition for Sustainable Flood Insurance. “When we began to engage on this issue last year, many in Congress were unaware of the serious challenges created by the Biggert-Waters Act, which threatens to devastate economies across coastal and riverine America.
“However, through the leadership of Congressmen Scalise, Cassidy, and Richmond, as well as Congressman Michael Grimm and Financial Services Ranking Member Maxine Waters, we now have legislation that will address the most pressing needs of our coalition, including protecting people who played by rules, and settling real estate markets. The Coalition also wishes to thank Majority Leader Cantor and House Republican Leadership as well as Leader Pelosi and House Democratic Leadership for their dedication and resolve towards finding a long-term solution to flood insurance. We look forward to again working with our Senate partners to approve this legislation and send it to President Obama’s desk.”
The Congressional Budget Office has confirmed that these changes to the NFIP will be accomplished without cost to the taxpayer. Contrary to the claims by some opponents, any additional cost or lost revenue will be recovered through charges paid by NFIP policyholders, and will not increase the burden on those not benefitting from the program.
This legislation does the following key things:
- Reinstates Grandfathering – This bill permanently repeals Section 207 of the Biggert-Waters Act, meaning that grandfathering is reinstated. This means that all post-FIRM properties built to code at the time of construction will have protection from rate spikes due to new mapping – for example, if you built to +2 Base Flood Elevation, you stay at +2, regardless of new maps. Also importantly, the grandfathering stays with the property, not the policy.
- Caps Annual Rate Increases at 15% – This bill decreases FEMA’s authority to raise premiums. The bill prevents FEMA from increasing premiums within a single property class beyond a 15 percent average a year, with an individual cap of eighteen percent a year. Pre Biggert-Waters, FEMA was unable to increase rates beyond 10 percent a year. Currently (Post Biggert-Waters), FEMA is unable to increase rates beyond 20 percent a year. The bill also requires a 5% minimum annual increase on pre-FIRM primary residence policies that are not at full risk. The updated legislation also states that FEMA shall strive to minimize the number of policies with premium increases that exceed one percent of the total coverage of the policy.
- Refunds policyholders who purchased pre-FIRM homes after Biggert-Waters (7/6/12) and were subsequently charged higher rates
- Permanently Removes the Sales Trigger – This bill removes the policy sales trigger, which allows a purchaser to take The new purchaser is treated the same as the current property owner.
Since May 2013, GNO, Inc. has organized a growing national coalition of business and elected leaders, now including over 200 business, trade associations and local governments in 34 states, in order to address harmful changes to the NFIP. As founders of this Coalition for Sustainable Flood Insurance (CSFI), GNO, Inc. works to align national business interests for the good of their local communities and the national economy.