Senate Approves House-Passed Flood Insurance Bill
The U.S. Senate voted 72 to 22 in favor of “The Homeowner Flood Insurance Affordability Act of 2014” (H.R. 3370), which caps the amount by which flood insurance rates can be raised each year. The legislation significantly changes the rate structure included in a flood insurance reform package that was signed into law just two years ago, the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12).
Intense pressure to provide relief from greatly increased rates under BW-12 led to the adoption of H.R. 3370. Advocates of rate relief cited the negative impact on coastal homeowners, saying many would have been forced out of their homes. Fiscal conservatives who opposed H.R. 3370 said rolling back the actuarially sound rates mandated under BW-12 was irresponsible, in light of the $24 billion debt of the National Flood Insurance Program (NFIP).
PIA successfully supported and advocated for mitigation provisions that were included in H.R. 3370. Now, we will work with Congress to craft long-term solutions for putting the NFIP—which PIA steadfastly supports—back on the road to fiscal stability in the coming years.
What It Means to Agents: Despite the passage of H.R. 3370, PIA supports the continuing implementation of Biggert-Waters (BW-12), along with a transition to risk-based rates that takes consumer affordability sufficiently into consideration. PIA also strongly supports the NFIP, which will now be under increasing financial stress due to this rate rollback. While relief from quick, astronomical rate increases—especially for certain homeowners in coastal states—was imperative, a move to risk-based rates going forward will help ensure the future availability of NFIP flood insurance for PIA’s clients.