It's a tale of two bills. One isn't going anywhere at the moment, and the other has been passed but will only delay the pain.
Next Monday, the Senate is slated to consider the Homeowner Flood Insurance Affordability Act, which would stop the Federal Emergency Management Agency (FEMA) from implementing sweeping flood insurance hikes for many homeowners until the agency completes an affordability study and Congress has a chance to review that study.
U.S. Rep. William Keating co-sponsored the bill. And while there appears to be bipartisan support for the measure, House Speaker John Boehner ruled last week that the House won't take up the legislation, suggesting he would support a more modest change.
That's bad news for homeowners affected by the increases, particularly in coastal communities like Plymouth. The hikes happened when FEMA remapped flood zones after several years of epic storms sunk the National Flood Insurance Program $20 billion into the red.
FEMA remapped the zones to bring them up to date, and massive increases in insurance prices followed. The result has been nothing short of disastrous for many who suddenly found their home is now in a flood zone. Real estate professionals predict the newly mapped zones could and likely will result in a flood of foreclosures.
The situation has become harder to swallow since the new zones are based on faulty information, according to Keating. He asked a team of scientists at the UMass Dartmouth School of Marine Science and Technology to look at FEMA's conclusions, and those experts shared conclusions of their own – mainly that FEMA used a Pacific Ocean model in its determination of Atlantic coastal flood zones. Keating is demanding FEMA conduct a more legitimate and accurate study of flood zones in Southeastern Massachusetts before any changes are made.
The increases will hit homeowners who hold mortgages on their homes, since banks will demand they obtain flood insurance if the property is in a flood zone. Those who own their homes outright may not be at risk for the hikes, but they still may need the insurance, given the possibility of flooding.
Insurance hikes have already impacted condominium owners, those owning second homes and properties that have experienced what are known as "repetitive losses," which speak for themselves.
The bulk of the increases, however, are slated to impact so-called grandfathered properties, or homes that used to receive government subsidies on their flood insurance – subsidies that have since dried up.
That's the bad news.
The good news is that an omnibus bill has been passed and signed into law stating that FEMA can't use any money in its budget to implement these hefty increases on grandfathered properties until Sept. 30, Keating's office explained Tuesday. It's a delay that could be repeated.
But for homeowners facing double-digit inceases in the cost of their flood insurance it won't be enough. In August, Rogers & Gray Insurance Partner David Robinsons said the average flood insurance premium ranges from $3,000 to $10,000, and those numbers could rise by 25 percent a year for four years, according to FEMA's calculations.
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