A bill that would delay flood insurance rate increases is currently stalled in Congress. With just a few days left before the end of the legislative session this year, REALTORS® at the local, state and national level are contacting their members of Congress and urging them to pass the Homeowner Flood Insurance Affordability Act. REALTORS® say this bill will help millions of homeowners who are facing sudden and extreme increases in flood insurance premiums that went into effect Oct. 1.
The Biggert-Waters Flood Insurance Reform Act of 2012 was intended to bring back financial stability to the National Flood Insurance Program (NFIP) by removing some subsidies, but affordability of insurance premiums was not taken into account. Under this law, owners must pay the full-risk rate, the rate that accurately reflects the full risk of being flooded. Previously, the government subsidized the insurance of many homes or "grandfathered" them, so the insurance rate was based on older flood maps showing lower risk.
The new rate increases are significant, with some of the hardest hit areas seeing rates of $10,000 per year or more. Even legislators who passed the measure last year were surprised at the alarming new rate increases.
To help fix some of the unintended consequences of the Biggert-Waters Flood Insurance Reform Act, the Homeowner Flood Insurance Affordability Act was introduced in both houses of Congress. The new bill delays further implementation of some of the mandated rate increases. This will allow the Federal Emergency Management Agency to complete an affordability study that was mandated by the Biggert-Waters Flood Insurance Reform Act; propose targeted regulations to address any affordability issues found in the study; and give Congress adequate time to review those regulations.
The National Association of REALTORS® has issued a nationwide "Call for Action," asking its members to contact their legislators and tell them to bring the Homeowner Flood Insurance Affordability Act to the floor for immediate consideration. REALTORS® are asking Congress for a four-year time-out to fully correct some of the implementation problems that will threaten real estate transactions where flood insurance is required.
"We need to ensure that this is a priority for Congress and that this bill is brought up for vote immediately. Congress has very few working days left in this session, so it is imperative that REALTORS® answer this 'Call for Action,'" said Carolyn Miller, president of the Silicon Valley Association of REALTORS®. "Higher flood insurance premiums will stall and could even sink home sales and disrupt recovering real estate markets across the country."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.