WASHINGTON, D.C. — White House officials say President Barack Obama will sign into law the legislation that will limit the yearly increases to flood insurance premiums paid to the National Flood Insurance Program (NFIP).

The Homeowner Flood Insurance Affordability Act restricts premium increases to no more than 18 percent per property, per year.  The U.S. Senate approved the bill with a 72-22 vote last week following passage from the U.S. House of Representatives earlier this month.

“That passing was huge,” said U.S. House Rep. David McKinley (R-WV, 1).  “That truly is.  I hope people can fully appreciate the magnitude of getting that thing corrected.”

The bipartisan bill was a response to the problems created with the 2012 Biggert-Waters Flood Insurance Reform Act which was a legislative attempt to make flood insurance premiums more accurately reflect risks.

To make the program more financially stable, many of the discounts and subsidies policyholders had received in the past, including those for second homes, were being eliminated.  Additionally, the flood-zone map was being revised.

As a result of the changes, many West Virginians — like those across the country — have seen their premiums jump dramatically, find themselves in flood plains that did not previously exist, or are stuck with homes they cannot sell because of the flood insurance requirements that come with federally insured home loans.

“Anyone that did get caught in it, and there were several, people that did pay a huge premium, their premiums will be refunded to them and we’ll be able to continue to offer (affordable) flood insurance (with this bill),” said McKinley.

Since 1968, taxpayers have been subsidizing the NFIP to protect people who live in flood plains inland and those subsidies have also been used for vacation homes in coastal locations and other areas with increased flooding risks.

Payments going out have long outpaced premiums coming in to the program, adding up to an estimated $24 billion NFIP debt.

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Comments

  • DWM

    As an insurance guy, I can shed some light on the pros and cons of this bill. This is a far more disruptive issue that you think. Imagine five years ago you bought a house in a flood plain that had never actaully been flooded in the existence of the house.

    Because it is in a flood plain, you had to buy flood insurance, no big deal, when you bought the home flood insurance was just $700/year. The problem now is Biggert Waters has changed the maps and rates and now your flood insurance is $2500/year. Think that is bad? Imagine trying to sell this same house when you want to relocatewhen the purchaser is looking at $2500/yr to get Flood Insurance and the only thing certain about that is that the premium is going up.This could devastate whole tneighborhoods and towns.

    On the other hand, why should taxpayers be obligated to pay, through taxes, for other people that bought properties in flood zones? That's what is happening now and will continue to happen when Obama signs this bill.

    My solution would be this, if you want to build a new structure, or significantly renovate an existing structure that is in a flood zone, you have to pay the actuarial rate, any existing structure gets grandfathered. Also, if you get flooded and your structure is totalled and FEMA pays out the limits of the policy, you can't rebuild on that sight.

    If these rules were enacted, over a lifetime, we would solve the issue. Is this going to be easy? No, but it will be fair.

  • Voter

    It is nearly impossible to obtain a new flood ins. policy with these new regulations. You must have a surveyor (at least 500.00 fee) come and perform an elevation certificate and then you have to send that to FEMA. If you are lucky in a couple of months they might approve that and then you might be able to afford an affordable policy. The gov't is slowly taking charge of the insurance and banking industries.

    • Natalie

      We had a surveyor survey our house for $750 for an elevation certificate. It did not lower our insurance payment but increase it by $1,100! This is after an increase from $700 to $1,300. So our new total to have insurance on our $65,000 house, 600sq ft living space is an outstanding $2,400/year! What we thought was going to be affordable housing in a good neighborhood has now turned into a frustrating battle with FEMA and insurance. What do we do?

  • Uncle Tom

    Another law we didn't need. And prez we should FIRE!

    • WV Citizen

      Hey Uncle Tom, lets fired the whole lot that voted for this bill, beginning with Capito, McKinley and Manchin. The Prez will be gone in 2 years.