Homeowner Flood Insurance Affordability Act gains momentum
Published 7:00 am Tuesday, February 25, 2014
The House flood insurance reform plan, H.R. 3370, the Homeowner Flood Insurance Affordability Act of 2014 has supporters speaking out as the vote date of Wednesday, Feb. 26th, approaches.
On Monday, Congressman Steven Palazzo, (MS-4), an original cosponsor of the bill, took to the social media platform Twitter to express his appreciation of the American Bankers Association for their stance of support that same day.
On Monday, the Gulf Coast Business Council sent a letter to Palazzo stating their support.
“The ripple effect of not addressing dramatic increases in flood insurance premiums mandated by the Biggert-Waters Flood Insurance Reform Act of 2012 would negatively reverberate across every part of South Mississippi’s economy. H.R. 3370 provides long-term sustainability to the National Flood Insurance Program while balancing the need to provide certainty in the market place to continue to attract and grow businesses along the Mississippi Gulf Coast.
“… Many concerns expressed by GCBC members are addressed in H.R. 3370 such as escrow provisions allowing policy holders to make monthly installments, restoring grandfathered rates, and tying subsidized premiums to the property rather than the individual homeowner, thus allowing the continued growth of our real estate market.”
Picayune Mayor Ed Pinero said the bill is important because it allows properties to be grandfathered in that were built to proper flood elevations under the previous map.
“This is an important bill to pass,” Pinero said. “People should not be punished now that we have a change in administration, when all parties did everything correct at the time of the transaction.”
David Vitter (R-La.) also issued a statement in support of the bill on Monday.
“Most importantly this legislation reinstates grandfathering, which means if you played by the rules and built or rebuilt your homes to code, you’ll be protected from the unaffordable rate increases,” Vitter said. “This is a permanent fix, not just a delay, plus it’s completely paid for so the program can sustain itself. The Senate bill was important to get the process going, but the House has strengthened and improved the legislation.”
“This is the same bill that was passed in Senate, but it has different text that provides for lasting, substantial reforms,” Palazzo’s office said. ““We have spoken about broader reforms, delays have been passed, but longer substantial reforms are needed. Clarification of rates and provision of certainty is needed. Real relief and lasting reform is what we have here.”
Palazzo said the bill focuses on compassionate rate management and repeals Section 207 and reinstates grandfathered rates. It makes Palazzo’s delay permanent. It gives policyholders more control to lower premiums through higher deductibles and mitigation. It caps yearly increases and uses new formulas that could save homeowners hundreds or thousands of dollars per year. It allows premiums to be paid in monthly installments, rather than in a yearly lump sum. It also repeals home sales triggers, that retroactively refunds home sale increases on Pre Firm properties, premiums to properties, not people.
“This is more than delays,” Palazzo said. “This gives permanent reforms give individuals and communities the certainty they need to plan.”
It also holds FEMA accountable, Palazzo said. It keeps them from moving goal posts on those who built back after Katrina. It requires FEMA to certify science behind mapping procedures. It expedites the affordability study, reimburses policyholders for successful map appeals and creates advocates to assist policyholders.
“I’m pleased with the creation of an advocate,” Pinero said. “But I have to caution against having someone who does not know our county blindly making determinations. I have had several instances where I have had to send corrections to out of state companies for flood elevations because they had the wrong location connected to an address. This is not uncommon.”