Bipartisan achievements are rare, but one of them was the 2012 reform of federal flood insurance.
- The goal of the Biggert-Waters reform of 2012 was to require that property owners gradually adjust to paying actuarial sound rates for taxpayer-backed flood insurance.
- Millions of Americans have long paid below-market rates to cover their shoreline homes, leaving the National Flood Insurance Program under water by some $24 billion after Hurricanes Katrina and Sandy.
- The federal program has $1.3 trillion in outstanding insurance, though private insurers provide flood coverage for losses above the federal $350,000 limit and are eager to do more.
Under the reform, already-subsidized vacation homes, businesses and “severe repetitive loss” properties would see premiums rise 25% per year until they paid actuarial rates.
- Owners of primary residences with federal flood insurance would see no change unless they sold their home, in which case the new homeowner would pay the actuarial rate.
- Biggert-Waters also instructed the Federal Emergency Management Agency to collect more refined data when it conducts its periodic remapping surveys.
- This new information, such as current elevation levels, would help the federal flood insurance program more accurately price premiums.
- Property owners would pay new rates when the maps were done, a process which could take three to five years.
This should slow down the fast rising flood insurance rates in coastal areas.
Read more Republicans cave to the Realtors on taxpayer flood insurance.