Jan 15 Sharp increases in flood insurance
premiums for many U.S. homeowners will be delayed for at least
nine months under a provision of the $1 trillion government
spending bill that was approved on Wednesday by the U.S. House
The stop-gap measure provides temporary relief for some
property owners facing steep increases in premiums, while buying
time for Congress to tackle a larger reform bill seeking a
four-year delay of implementation.
The federal spending bill now moves to the U.S. Senate,
which is expected to pass it this week and send it to the White
House for President Barack Obama's signature.
Members of Congress from several coastal states such as
Florida, Louisiana and New Jersey are seeking to reform the 2012
Biggert Waters Flood Insurance Reform Act that boosted premiums
in flood risk areas. They have pushed for a measure that would
require the Federal Emergency Management Agency (FEMA) to
complete an affordability study and re-evaluate the accuracy of
new flood maps before increasing future flood insurance
The provision will "halt increases for existing homeowners
and help approximately 2 million Florida families through fiscal
year 2014," said U.S. Representative Kathy Castor, a Democrat
from the Tampa bay area.
"During the delay, the Federal Emergency Management Agency
and Congress need to go back to the drawing board for a
permanent fix to ensure that our neighbors and small business
owners do not suffer unconscionable increases," Castor said.
The provision in the Omnibus spending bill covers only about
a quarter of the policies affected by the Biggert-Waters Act,
according to an estimate cited by Florida Senator Bill Nelson,
also a Democrat.
"Congress, it seems, is finally hearing the pleas of some of
the homeowners," Nelson said in a statement. "This is only a
partial solution and there is still work to be done," he added.
Leaders of both parties in the Senate are trying to see if
they have enough agreement on amending the Biggert Waters law
before a recess that starts at the end of this week.
"We have a bipartisan coalition that badly wants to get this
done and so we're going to do everything we can to move forward
on this," Senate majority leader Harry Reid said on Wednesday.
He noted that Republicans had not yet signed off on going
ahead, however. If there is no agreement today on moving forward
Reid said "We'll tee this up so it's the first vote we have"
after the recess.
"Hopefully we'll be able to figure out a way forward here in
the not-too-distance future," said Senate Republican leader
Congress passed the Biggert Waters Act in July with strong
bipartisan support in an effort to balance a $24 billion deficit
in the National Flood Insurance Program, which had growing
losses from Hurricane Katrina in New Orleans in 2005 and earlier
disasters. Months after the bill was passed, Superstorm Sandy
devastated the northeastern coast in late October.
The rate hike is designed to make property owners pay for
the true risk of living in high flood hazard areas, including
coastal areas of Florida, New Jersey, New York, Texas and
Louisiana, and inland states prone to river flooding.
The hike could affect a million homeowners living in older
houses along U.S. coastlines and river banks, with the annual
flood insurance premium on some homes set to jump tenfold over
the next few years.
The Biggert Waters Act requires FEMA to phase out insurance
subsidies enjoyed for decades by owners of homes that were built
in high-risk flood zones before the creation of the original
federal flood insurance rate maps and building standards, which
in most communities occurred in the 1970s and 1980s.
Critics of subsidized federal flood insurance say the
benefits disproportionately favor high-risk properties owned by
FEMA Director Craig Fugate told a September hearing of the
U.S. Senate Banking, Housing and Urban Affairs Committee that
the act unfairly hit middle-class homeowners who had not been
(Additional reporting by Richard Cowan in Washington D.C.;
Editing by David Gregorio)