NAHB Applauds Passage of Homeowner Flood Insurance Act
National Association of Home Builders (NAHB) applauds the efforts made by the U.S. House of Representatives to reform many of the costly and unintended consequences of the Biggert-Waters Flood Insurance Reform Act that was passed in 2012. This week, the House passed the Homeowner Flood Insurance Affordability Act, which will benefit both home buyers and homeowners. In addition, the bill will provide a boost to the home building and remodeling industry while providing certainty and financial stability to the National Flood Insurance Program (NFIP).
“By providing predictable premium increases, the Homeowner Flood Insurance Affordability Act (H.R. 3370) will prevent home values from dropping and make the NFIP stronger and more effective for years to come,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del.
The Biggert-Waters legislation had costly unintended consequences for homeowners, including huge premium spikes and impacts on the sale, construction and remodeling of homes across the country. The new bill, which was sponsored by Reps. Michael Grimm (R-N.Y.) and Maxine Waters (D-Calif.), will provide homeowners with much more clarity on how flood insurance will affect them.
The Homeowner Flood Insurance Act will:
- Provide a more affordable rate structure for policyholders, including caps on average annual premium increase at 15 to 18 percent.
- Repeal the rate increases from the sale or transfer of homes and provide retroactive refunds.
- Create more accurate flood maps.
- Provide reimbursement for successful consumer map appeals.
- Return the “substantial improvement threshold” that triggers a higher flood insurance rate to the historic 50 percent level of a structure’s fair market value, which would preserve significant remodeling activity.
- Reinstate an exemption in 53 communities nationwide for basements that are built in a flood-proof manner.
“H.R. 3370 provides a common-sense, bipartisan approach to flood insurance reform that won’t add a dime to the federal deficit while ensuring that premium holders will not face drastic rate hikes,” said Kelly. “NAHB urges the Senate to move quickly to pass this bill.”
The U.S. Senate recently passed a similar bill that contained larger reforms for the Biggert-Waters law. However, key Senators have said they would accept the House bill, including Sen. Robert Menendez (D-N.J.), the sponsor of the Senate version.
Rep. Waters acknowledged that the House bill will help undo some of the negative effects of the 2012 law she helped write.
“If enacted into law, this legislation will provide homeowners living in flood-prone regions with clarity and certainty that the cost of their insurance will not force anyone from their homes, lead to depressed home prices, or undercut their ability to buy or sell a home,” said Waters. “I urge passage of this legislation by the House and Senate without delay.”
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