Premium increases for homeowners who depend on the National Flood Insurance Program, set to kick in as soon as Oct. 1, are “drastic and unsustainable” and are already hurting home values and “freezing the market” in some flood-prone communities, the Independent Community Bankers of America is warning House and Senate leaders today.
The ICBA wants lawmakers to pass legislation that would put the increases on hold until the Federal Emergency Management Administration (FEMA) completes a study to determine their impact on affordability. In some cases the group says the phased-in premium increases will exceed 500 percent or more. “Premiums of $25,000 a year or more on modest single-family homes are disproportionate to the risk and to the value of the home.”
The premium increases were mandated by the Biggert-Waters Flood Insurance Reform Act of 2012, which reauthorized the National Flood Insurance Program (NFIP) through 2017. The National Association of Realtors lobbied long and hard to get lawmakers to extend the flood insurance program, saying private insurers were unprepared to cover 21,000 communities around the nation where flood insurance is required to obtain a federally related mortgage.
Louisiana’s congressional leaders have also petitioned House and Senate leaders to delay the increases, The Times-Picayune (New Orleans) reports. Source: nola.com.