Massachusetts Delegation helped lead effort in protecting home and business owners from unaffordable flood insurance rate hikes

Washington, DC – United States Senators Elizabeth Warren and Edward J. Markey today praised the Senate’s passage of the "Homeowner Flood Insurance Affordability Act," bipartisan legislation that will help protect millions of homeowners in Massachusetts and across the country from facing unaffordable Federal Emergency Management Agency (FEMA) flood insurance premium rate hikes. The legislation previously passed the House of Representatives last week and now will be sent to President Obama to be signed into law.

"I am deeply relieved that the Senate has now passed this important legislation to protect families here in Massachusetts and across the country from unaffordable and unexpected flood insurance rate hikes,” said Senator Warren. "This legislation will require FEMA to ensure its maps are up to date, reliable, and reflect the best available scientific data, and will make sure that families who played by the rules can afford to stay in their homes." 

“Business and homeowners need a flood insurance program that will help protect them from rising seas but doesn't flood them with a surge in their insurance premiums,” said Senator Markey. “We need to find a permanent affordability fix to high premiums while ensuring that the risk of living in structures that could be catastrophically flooded is accurately conveyed to home and business owners. We also must ensure FEMA utilizes the best science when devising these new flood maps, and communities are reimbursed when they've successfully appealed flawed flood maps.”

As flood zones are updated as a result of implementation of the Biggert-Waters National Flood Insurance Reform Act, many families in Massachusetts and across the country have been placed into a flood zone for the first time and are being required to pay thousands of dollars in premiums under new flood insurance rate rules. The Homeowner Flood Insurance Affordability Act will delay the implementation of the new maps until FEMA completes an affordability study. The legislation also includes a provision advocated by Senator Warren that would compensate homeowners when they successfully appeal their placement into a flood zone.

This legislation will protect homeowners by limiting yearly premium increases to an average of 15 percent per year for each of the nine property categories listed by FEMA, and stipulates that no individual policyholder will pay an increase of more than 18 percent per year. It calls on FEMA to strive to reach the goal of most policyholders having a premium of no more than one percent of the value of their coverage. The bill reinstates the flood insurance program's grandfathering provision so that homes that complied with previous flood maps would not be hit with large increases when new maps show a greater risk of flooding. It also eliminates a provision that required an immediate hike to actuarial levels when ownership of a home changes. The changes in this legislation would be paid for primarily by a $25 surcharge on residential properties and $250 for non-residential properties or non-primary residences.

Senators Warren and Markey are original co-sponsors of the bill that passed in the Senate in January. In September, the Massachusetts Congressional delegation sent a letter to House and Senate leadership calling for fixes to the Biggert-Waters National Flood Insurance Reform Act of 2012 to avoid increases to home and business owner insurance premiums. In October, Senators Markey and Warren signed a bipartisan letter calling for a one-year delay of the new insurance rates. In December, members of the Massachusetts Congressional delegation sent a letter to FEMA requesting a delay in the implementation of the Commonwealth's new flood maps until they are amended to appropriately reflect the geographic region.