The U.S. Senate passed H.R. 3370, the Homeowner Flood Insurance Affordability Act, Thursday, March 13.
The 72-22 vote means the bill will now head before President Barack Obama, who is expected to sign the bill into law.
H.R. 3370 took steps toward structural reforms for the 2012 Biggert-Waters Flood Insurance Reform Act’s dramatically increased flood insurance rates. The act was an effort to balance the National Flood Insurance Program’s (NFIP) budget, estimated at $24 billion in debt.
Wrightsville Beach Town Manager Tim Owens said the new bill is a step in the right direction, but there will still be impacts.
“Rates will be modified, but not to an extreme level like they were going to be. There’s still some uncertainty,” Owens said. “It’s a lot better than what was being proposed.”
Annual increases are capped at 18 percent per property for newer properties generally built after 1975. For primary homes built before 1975, there is a 5 percent floor and 18 percent ceiling for annual premium increases.
Increases for second homes, commercial properties and severe repetitive loss properties are capped at 25 percent.
Grandfathering is reinstated for all post-Federal Insurance Rate Maps (FIRM) properties to protect against rate increases from new mapping for homes and businesses built to code at the time of construction.
There will be a $25 annual surcharge to primary residences and $250 for second homes and businesses until policies reach full risk rates that will go toward the National Flood Insurance Program fund.
Sen. Kay Hagan, D-N.C., and Sen. Richard Burr, R-N.C., voted in favor of H.R. 3370.
Hagan wrote an amendment to ensure borrowers with second mortgages and loans to purchase a property with an already existing master policy are not forced to escrow flood insurance premiums twice or prove they already have coverage to a lender.
“North Carolina homeowners who have played by the rules should not be saddled with steep flood insurance rate hikes that could mean financial ruin for too many people,” Hagan stated in a March 13 release.
Rep. Michael Grimm, R-N.Y., was the lead sponsor of the House version of the bill.
On March 4, the U.S. House of Representatives passed H.R. 3370 with 238 cosponsors and a 306-91 vote, meeting the necessary two-thirds majority needed since the bill did not go through committee.
FEMA has eight to 16 months to implement the changes. H.R. 3370 is up for renewal on Sept. 30, 2017.