U.S. Representatives Michael Grimm and Gregory Meeks, joined by colleagues Charles Rangel, Eliot Engel and Jerold Nadler on Monday, March 11th, announced the introduction of a bill to ease the impact of rapidly increasing flood insurance rates.
The Flood Victim Premium Relief Act of 2013, H.R.960, is designed to aid survivors of Superstorm Sandy by extending the currently mandated premium increase timeline for primary residences in areas that have been declared a federal disaster area after July 6th, 2012. This would extend the implementation of the increased rates from 5 years to 8 years.
Said Grimm, “Given the massive destruction faced by victims of Superstorm Sandy, with many having their lives completely upended both emotionally and financially, this bill is vitally important.
“If we allow flood premiums to increase on their current schedule, based on the new maps, homeowners are going to be in an impossible position of trying to both pay their mortgage as well as increased flood premiums that may rise over $10,000 in some cases.”
He was referring to both Federal Emergency Management Agency’s new Advisory Base Flood Elevation (ABFE’s) levels and the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012.
FEMA’s new ABFE’s establish a wider range of areas that are designated as at risk for damaging flood surges. The new guidelines also set forth much higher required elevations for the first floor living spaces of houses within those areas.
The number of homes affected by the new FEMA flood elevation plane maps has increased from 35,000 to 70,000.
Biggert-Waters, initiated in the wake of Hurricane Katrina, phases out governmental subsidies to the National Flood Insurance Program (NFIP) by September 30th, 2017.
Grimm noted, “This situation will almost certainly lead to a surge in defaults and foreclosures and cost the taxpayers vast sums via the government’s exposure to Fannie Mae, Freddie Mac and the FHA. Allowing an extra three years to increase premiums will give both homeowners and localities time make smart, long term flood mitigation and rebuilding plans.”
According to a joint release from Grimm and Meeks, “Under Biggert- Waters …the maximum rate increase the NFIP could impose in a given year was raised from 10% to 20%. This was done as an attempt to bring the heavily indebted program back to solvency over time.”
The bill they have introduced “would slow the rate of increase in declared disaster areas for the first four years after a remapping from 20% per year to 5% per year, with rates in years 5 through 8 returning to the original 20% a year increases.”
The new bill, introduced by Grimm, was co-sponsored by Meeks, Peter King and Carolyn McCarthy. The legislation has gained the support of other members of the New York congressional delegation and is now also co-sponsored by Representatives. Jerrold Nadler, Charles Rangel, Joseph Crowley, Eliot Engel, Grace Meng and Hakeem Jeffries.
“Not a day goes by that my office is not making a call to a bank or an insurance company on behalf of my constituents who were deeply affected by the storm. This premium relief bill will give some relief from the tremendous cost of rebuilding their lives,” said Meeks.