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April 24, 2014

Possible Relief From Flood Insurance Hikes

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Possible Relief From Flood Insurance Hikes

Congress may delay flood insurance hikes for thousands of homes along the Gulf Coast and other areas that are facing steep premium increases, The Wall Street Journal reports. A $1.012 trillion spending bill to fund the government includes a measure that would temporarily continue flood-insurance subsidies for some properties located in flood zones.

The 2012 Biggert-Waters law sets out to gradually phase out flood insurance subsidies. The subsidies are being phased out due to the national flood insurance program being $24 billion in debt. That means home owners who have long received discounts to pay for flood insurance are now being faced with large increases — anywhere from a few thousand dollars to tens of thousands of dollars extra a year. Home owners affected say the increases will hurt their home values and make their homes more difficult to sell. 

The provision included in the spending bill would prevent FEMA from updating “grandfathered” rates when new flood maps are issued for nine months. It would not apply to increases triggered by a property’s sale that FEMA implemented last October.

Steve Brown, president of the National Association of REALTORS®, says the bill “does not go far enough to support the millions who are impacted by the exponential price increases.” 

Sen. Mary Landrieu, D-La., is pressing for separate broader flood-insurance legislation in the Senate that would delay price increases for more home owners nationwide for up to four years.

Correction: An earlier version of this story mischaracterized how the provision of the spending bill that calls for delays in flood insurance hikes would be applied.

Source: “Congress May Delay Flood Insurance Rate Increases,” The Wall Street Journal (Jan. 14, 2014)

Read more:

Mitigation Can Soften Flood Insurance Hikes
NAR Urges Home Owner Relief on Flood Insurance Spikes
Shoring Up Flood Insurance Comes at a Cost