Forum and wire reports, Published March 13 2014
Congress approves bill to limit flood insurance increases; Obama expected to sign it into lawWASHINGTON – A bipartisan bill to protect millions of Americans from potentially unaffordable increases in the cost of federal flood insurance won final congressional approval on Thursday.
The bill, which was first passed by the House, was approved by the Senate on Thursday and now goes to President Barack Obama, who is expected to sign it into law, said Don Canton, a spokesman for Sen. John Hoeven.
With homeowners and businesses facing premium hikes of up to 10-fold or more, the measure would limit annual increases of any individual policy under the National Flood Insurance Program to no more than 18 percent.
Fargo City Engineer April Walker said the city is “very grateful” for all the work that Hoeven, U.S. Sen. Heidi Heitkamp and U.S. Rep. Kevin Cramer have done to pass the bill.
“We’re going to look forward to doing what we can to try and get projects completed so that some people don’t need to see those rate increases in the future,” Walker said.
Fargo has about $67 million in flood protection projects set for this year, including buyouts, demolitions of already-purchased homes, and levee and floodwall work.
The federal bill instructs the Federal Emergency Management Agency to have “an affordability target” that would seek to limit the cost of a flood insurance policy to 1 percent of a home’s or business’s total coverage amount.
The bill also includes the Hoeven-Heitkamp-Cramer basement exception, which allows homeowners to receive credit for flood-proofed basements when determining flood insurance rates.
Walker said this is crucial for keeping premiums low for homeowners who have made their houses safe, even if FEMA raises the city’s base flood elevation, which is expected to occur in 2015.
The bill also states that the sale of a home will no longer automatically trigger higher, actuarial flood insurance rates.
The federal legislation was drafted in response to the Biggert-Waters Flood Insurance Reform Act of 2012, which was designed to allow premiums to rise to reflect the true risk of living in high-flood areas.
That law was passed to address a $24 billion deficit in the National Flood Insurance Program. The law did not stipulate that rates would soar by 10 times or more, but that is what happened to the surprise of lawmakers and consternation of homeowners and small businesses. This elicited a bipartisan reaction in Congress.