Obama To Sign Flood Rate Bill
WASHINGTON (AP) – President Barack Obama is set to sign into law a bipartisan bill relieving homeowners living in flood-prone neighborhoods from big increases in their insurance bills.
The legislation, which cleared Congress on Thursday, reverses much of a 2012 overhaul of the government’s much-criticized flood insurance program after angry homeowners facing sharp premium hikes protested.
The Senate’s 72-22 vote sent the House-drafted measure to Obama. White House officials said he’ll sign it.
The bill would scale back big flood insurance premium increases faced by hundreds of thousands of homeowners. The measure also would allow below-market insurance rates to be passed on to people buying homes in flood zones with taxpayer-subsidized policies.
Critics say Washington is caving to political pressure to undo one of the few recent overhauls it has managed to pass.
“While politically expedient today, this abdication of responsibility by Congress is going to come back and bite them and taxpayers when the next disaster strikes,” said Steve Ellis, vice president of Taxpayers for Common Sense, a Washington-based watchdog group. “Everyone knows this program is not fiscally sound or even viable in the near term.”
The hard-fought 2012 rewrite of the federal flood insurance program was aimed at weaning hundreds of thousands of homeowners off of subsidized rates and required extensive updating of the flood maps used to set premiums.
But its implementation stirred anxiety among many homeowners along the Atlantic and Gulf coasts and in flood plains, many of whom are threatened with unaffordable rate increases.
The legislation offers its greatest relief to owners of properties that were originally built to code but subsequently were found to be at greater flood risk. Such “grandfathered” homeowners currently benefit from below-market rates that are subsidized by other policyholders, and the new legislation would preserve that status and cap premium increases at 18 percent a year. The 2012 overhaul required premiums to increase to actuarially sound rates over five years and required extensive remapping.
Many homeowners faulted the Federal Emergency Management Agency’s implementation of the 2012 law. In some instances, homeowners from areas that had never been flooded were shocked and frightened by warnings of huge, unaffordable premium increases. The resulting uproar quickly got the attention of lawmakers and peppered them with complaints.
“In many cases, these are people with $100,000 homes that are getting (flood insurance) bills that are more than their mortgage payments,” said Rep. John Fleming, R-La. “You had certainly a significant number of people who were really going to be hurt seriously through no fault of their own.”