Homeowners Relieved After Senate Delays Insurance Hikes

By
Real Estate Agent with Keller Williams Realty

On January 30th the Senate passed a bill to sharply delay the increases in flood insurance rates for millions of property owners in coastal and flood-prone areas. The bill effectively guts a 2012 law (“Responsible Implementation of Flood Insurance Reform Act”) that had aimed to overhaul the nearly bankrupt National Flood Insurance Program. The Program which subsidizes insurance for buildings in flood zones, had a $24 billion deficit following claims from Hurricane Sandy. The law’s aim was to raise revenues for the federal flood insurance program. The law had also required updating of federal flood zones, which could determine which property owners will be required to purchase flood insurance by their mortgage holders.

Although the bill delaying the rate increases had bi-partisan support it still drew criticism from a broad spectrum of outside groups.  “It will return the program to a state of insolvency,” and “General taxpayers will be footing the rest of the cost.” according to an article written in the New York Times that quoted Shai Akabas an analyst at the Bipartisan Policy Center, a Washington research group. The aim of the 2012 law was to shift the financial risk of insuring flood-prone properties to the private market from taxpayers. The debate over who will pay for the nation’s rapidly rising costs for flood damage remains unclear.

Over the past year, millions of coastal property owners were hit with flood insurance rate increases that sent their premiums soaring up to five or 10 times the previous amounts. As their insurance bills soared and their property values plummeted, homeowners begged lawmakers to block or delay the 2012 law.  

Here in Savannah, a coastal city, on Tybee Island most properties are located in the highest risk flood areas, known as V zone. With few exceptions, Tybee non-primary residences with a first floor not built off the ground would have seen a significant increase. Many other parts of Chatham County are also located in high flood risk zones, and many homes built before the creation of the National Flood Insurance Program have long been eligible for subsidized policies.

 

Find out more from FloodSmart.gov the official site of the National Flood Insurance Program.

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COASTAL GEORGIA AND THE SEA ISLANDS
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