The New Flood Insurance Bill: By the Numbers
Congress approved a bill this month to reverse many flood insurance reforms and slow flood insurance premium increases.
The Senate bill, co-written by NJ. Senator Bob Menendez(D), now goes on to the President Obama, who is expected to sign it in to law.
The bill, which passed through congress easily, unwinds some of the chances in the National Flood Insurance Program introduced by the Biggert-Waters Flood Insurance Reform Act of 2012, which would have caused local flood insurance premiums to skyrocket.
The new bill restores “grandfathering” of policies in communities with new flood maps, including many South Jersey coastal towns. It would also allow the seller of such homes to pass that grandfathering on to the buyer, an important consideration hanging over the Shore real estate market.
Here’s a brief look at the flood insurance issue by the numbers……
– 15% : Under the new legislation, flood insurance would increase 5% to 15% each year until rates reach the full-risk level of the flood-prone area. This prevents FEMA from raising the average rates for a class of properties above 15% and from raising rates on individual policies above 18% per year for virtually all properties.
– 25% second home owners and owners of homes that have flooded multiple times face a 25% a year increase in rates
– $24 billion: The amount of debt the National Flood Insurance Program is to the U.S. treasury
– 800%: One example of the type of premium increase that would have been possible under the former law, the Biggert-Waters Flood Insurance Reform Act of 2012, showing a premium of $3000 a year increasing to $27.000 a year- an 800% increase!
– $5.5 billion: New Jersey is the third highest state in insurance program payouts since 1978, with $5.5 billion paid
– 72-22: The Senate approved the bill 72-22. The House passed H.R. 3370 on March 4 in a 306 – 91 vote.