President Obama signed a bill into law last week that will limit flood insurance premium increases, bringing some financial relief to South Queens and Rockaway residents who were bracing to potentially be priced out of their homes – or even lose the houses in which they grew up and raised families to foreclosure.
The Homeowner Flood Insurance Affordability Act bars flood insurance premiums from increasing by more than 18 percent a year. The new law is an attempt to address a long list of problems stemming from the 2012 Biggert-Waters Act – a piece of legislation passed by Congress that aimed to address the myriad financial problems faced by the debt-ridden National Flood Insurance Program, which began hemorrhaging money following Hurricane Katrina.
But, in an attempt to make the insurance program more financially solvent by phasing out some subsidized insurance rates and allowing for rate increases of about 20 to 25 percent each year until properties reached actuarial status, residents said Biggert-Waters created numerous unintended consequences that could have spelled disaster for many in coastal communities. The rate increases, residents said, would have forced people from their homes because individuals would be unable to pay their insurance premiums – which could have skyrocketed by tens of thousands of dollars.
Now, however, the new flood insurance law will limit yearly premium increases to an average of 15 percent – and no higher than 18 percent – annually. It also calls on the Federal Emergency Management Agency to ensure that most policyholders have a premium of no more than 1 percent of the value of their coverage. So, for example, someone with a $200,000 policy would pay no more than $2,000.
The new law also stipulates that FEMA must complete an insurance affordability study.
While area leaders welcomed the new law, they said it is not smooth sailing from here on out and noted that the National Flood Insurance Program will need re-authorization in 2017 – potentially starting another round of battles.
According to a statement from the group Stop FEMA Now, residents must push the government to fix erroneous flood maps and actuary rates and better regulate FEMA.
By Anna Gustafson