Flood Insurance Increase Relief – for Now

A collective sigh of relief should have been audible when recently the U.S. House of Representatives voted to pass HR 3370 and when the Senate passed their equally important bill S1926 that echoed similar language, both of which curb some of the financial pain residents in coastal flood zones have been anticipating and experiencing. The house bill highlights include: reinstatement of grandfathering; caps on annual rate increases to 15%; refunds to policyholders who purchased pre-FIRM homes after Biggert-Waters (July 16, 2012) and were subsequently charged higher rates; and funding for an affordability study with mandated completion.

Marshfield has held the charge against the severity of the Biggert-Waters Act in Massachusetts. Their website notes that “…rates may still spike should homeowners not in a flood zone now get mapped into a flood zone…” and points to the FEMA maps which many residents and towns feel are out of whack with reality.

And everyone impacted – from homeowners to realtors to insurance companies – are seeking a way to end the drama and find a solution that all may live with.

The Insurance Journal’s website, www.insurancejournal.com, recently posted: “The U.S. House of Representatives…passed legislation to curb some of the premium increases in the nation’s flood insurance program that have been causing “sticker shock” for property owners.

H.R. 3370, the Homeowner Flood Insurance Affordability Act, sponsored by Reps. Michael Grimm (R-N.Y.) and Maxine Waters (D-Calif.), passed 306-91 under a “suspension of the rules” requiring a two-thirds vote in favor. The measure reverses some of the changes to the National Flood Insurance Program (NFIP) introduced by the Biggert-Waters Flood Insurance Reform Act of 2012.

The Senate passed its version of flood insurance legislation, S. 1926, in January by a 67-32 vote. The Senate bill takes a broader swipe at the NFIP and delays most of the reforms and increases of the Biggert-Waters law for four years.

However, key senators, including Sen. Robert Menendez, (D-N.J.), the sponsor of the Senate version, said they would accept the House bill.

Mattapoisett has a new committee that is following these events and strategizing ways to re-visit FEMA mapping that may aid residents staring down the barrel of escalating flood insurance rates. I recently spoke to Bill Cantor who is a member of the Mattapoisett Flood Plain Committee.  Cantor said that the committee met with Mike Gagne, the town’s administrator, at which time they hosted a meeting with an engineering firm. The engineering firm was brought in to brainstorm methodologies that may help the town prepare a rebuttable to the FEMA maps currently in force. These maps have placed some residences in jeopardy of extreme insurance rate spikes. Cantor said that the committee suggested to Gagne that by having engineering surveys completed and coupled with the assessor’s LOMA mapping (Letter of Map Amendment), they would have a viable opportunity to reverse some of the decisions the FEMA mapping has brought to bear.

Of the recent legislative actions Cantor said, “It delays things but it doesn’t make it go away…” He said that if relief for coastal communities doesn’t come to pass, the value of those homes are likely to plummet, forcing residents to seek property tax relief. If that happens, Cantor said that property in the interior will become more valuable, thus pushing those tax rates up. “Everyone will feel the pain,” he said.

Cantor said his committee will be using tools to look for errors in the FEMA maps that may help some homeowners. It now appears that for the spring town meeting, Mattapoisett voters will be asked to fund an engineering study that will aid the effort to get flood mapping to the point of being acceptable to the community. If documentation is produced that makes a compelling case to amend the FEMA maps, Cantor said, the town can then complete a process to request a review of FEMA mapping and ask for adjustments that may help some, but not all, in Mattapoisett.

By Marilou Newell