Major Flood Insurance Legislation Nearing US Senate Vote

A major reform to flood insurance, the Homeowners Flood Insurance Affordability Act, S.1926, is awaiting action from the US Senate as soon as today.

NACo has urged county officials to contact congressional representatives in support of the legislation.  A full explanation of the NACo position, including a summary of county impacts, is available on the NACo website.

From the NACo summary:

Background Information and Why this Issue Matters to Counties

  • The purpose of the Biggert-Waters Act of 2012 (BW-12) was to make FEMA’s National Flood Insurance Program (NFIP), which faced a deficit of $24 billion, solvent. However, BW-12 resulted in some unintended consequences for local governments, residents and businesses. S. 1926 and H.R. 3370 have been introduced to address this issue.
  • A number of the nation’s 3,069 counties represented by NACo, both coastal and inland, have stated that their homeowners and business are facing drastically increasing annual NFIP flood insurance premiums due to BW-12’s phase-outs of subsidized premium rates. According to the Government Accountability Office, properties in 2,930 counties had subsidized policies as of June, 2012.
  • Many low-lying areas contain lower income and/or middle income resident and business properties.  As insurance rates rise rapidly in certain areas, owners have two options – sell or walk away from mortgages. Since selling properties with high annual insurance premiums is unlikely, people could walk away from existing mortgages, impacting both local economies and housing markets. As more homes become vacant, counties’ property values are in turn impacted.
  • As the Federal Emergency Management Agency (FEMA), which oversees the NFIP program, continues to update its Flood Insurance Rate Maps (FIRMs), more low-lying areas may begin to face drastic premium rate increases in the future.

Michael Sanderson

Executive Director Maryland Association of Counties
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