Rate Hikes on Flood Insurance
- Posted on Friday, July 5, 2013
Per Property 360:
Members of Congress are demanding that the Federal Emergency Management Agency finesse the impact of steep flood insurance premium increases mandated by a 2012 law even as a key government watchdog lauded FEMA for its efforts to ensure that flood insurance rates reflect risks.
In a little-noticed recommendation to another report on flood insurance issues, the Government Accountability Office Wednesday praised FEMA for taking steps to ensure that the “methods and data used to set NFIP rates accurately reflect the risk of losses from flooding.”
GAO said it “continues to support previous recommendations to FEMA in that regard.”
The GAO recommendation was released the same day Rep. Maxine Waters, D-Calif., ranking minority member of the House Financial Services Committee and a key sponsor of the 2012 bill, joined 26 colleagues in a letter to FEMA urging the agency “to use any discretionary authority available to address an unintended consequence” of the Biggert-Waters Flood Insurance Reform Act, the 2012 bill.
In the letter, the House members said that “a small percentage of homeowners are learning that they may be subjected to flood insurance rates that are ten, a hundred, and in some cases, more than a thousand times higher than their current subsidized rates.”
“While Congress has shown it is willing to act to address these issues, we believe that FEMA has the authority to administratively address some of the affordability issues arising from Biggert-Waters,” the letter says.
The letter asks FEMA to take steps to not implement a provision of the law that ending grandfathered premiums for policyholders, who, as a result of new flood-risk maps, have their risk designation changed to "below base flood elevation."