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Insurance Advisor at Oliver L.E. Soden Agency, Inc

Flood Insurance Relief Bill Signed by President Obama

It’s a moment that many have been waiting for: President Barack Obama has signed the H.R. 3370, the “Homeowner Flood Insurance Affordability Act of 2014,” into law. This bill will bring relief to those who pay high prices for flood insurance. H.R. 3370 will repeal both Section 205’s bought/sold provision and all of Section 207 of Biggert-Waters. In addition, the new law will outline some of the details of the legislation and how they affect independent agents, brokers and clients.

 

If you are one of the many homeowners who pay for flood insurance, you’re familiar with the sharp premium hikes that you’ve had to pay thanks to an overhaul of the government's flood insurance program back in 2012. Many of those affected live right here in New Jersey and had to deal with exceptionally high premium increases following Hurricane Sandy. These premiums were so costly, they actually threatened some families from their homes.

 

The original goal was to get residents in flood-prone areas off of a subsidized rate. The trouble was that this new approach involved extensive updates on the flood maps that are used to determine premiums, and it left many people living off the Atlantic and Gulf Coasts with unbearably high premiums.

 

The new flood insurance relief bill caps flood insurance premium increases and allows below-market insurance rates to be passed on to people who are buying homes in flood-prone areas, according to Insurance Journal. Critics of the bill worry that when the next disaster strikes, they will be responsible for footing the bill instead of homeowners who choose to live next to water.

 

But, lawmakers assure critics that the intention is to offer relief to homeowners who own properties that were not originally built to code and are now found to be at flood risk. The bill also helps homeowners who are buying a near-water property by allowing the below-market rates to be passed onto them. This should help properties off the East Coast be more affordable and practical, as home sales in these areas have slowed because of the high flood premiums.

 

While it’s true that some people make the conscious effort to live by water and pay the price, many others are simply deemed at risk for potential flood problems and shouldn’t have to pay such high premiums, enough to force them from their homes. At the end of the day, we want to make insurance practical, convenient and affordable for homeowners so that more people protect their homes.