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.