Deal reached to delay flood insurance premium hikes

Legislation designed to delay the majority of rate increases for the National Flood Insurance Program policies is set to be introduced in the Senate this week. The legislation, which is sponsored by Sen. Robert Menendez, D-N.J., is the result of a bipartisan agreement between the U.S. House and Senate reached to address the issue of affordability within the NFIP. It is believed that the legislation would delay rate increases for a period of four years. The delay would apply to primary, nonrepetitive loss residences that currently are grandfathered; all properties sold after July 6, 2012; and all properties that purchased a new policy after July 6, 2012.  

The legislation states that NFIP rate increases will be delayed while the Federal Emergency Management Agency completes an affordability study as well as for an additional period of two years following completion of the study. FEMA has said that the affordability study, which originally was required under the Biggest-Waters Flood Insurance Reform Act of 2012, will take at least two years to complete. Therefore, it is believed that rate increases will be delayed for a period of four years. FEMA also will be required to propose regulations to address the issues of affordability within 18 months of completion of the study. A six-month moratorium will then be implemented to provide time for Congress to review the regulations prior to them going into effect. In addition the legislation will:



  • Allow FEMA to utilize National Flood Insurance Funds to reimburse policyholders who successfully appeal a map determination.
  • Eliminate the 50 percent cap on state and local contributions to levee construction and reconstruction
  • Protect the so-called “basement exception,” which allows the lowest proofed opening in a home to be used for determining flood insurance rates.
  • Establish a Flood Insurance Rate Map Advocate within FEMA to answer current and prospective policyholder questions about the flood mapping process.
  • Require FEMA to certify that the agency has fully adopted a modernized risk-based approach to analyzing flood risk.


Companion legislation will be introduced in the House by Rep. Maxine Waters, D-Calif., a named sponsor of the Biggert-Waters Act. It is anticipated that Rep. Michael Grimm, R-N.Y., will be a co-sponsor on the House bill.

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