Bipartisan legislation for holding back rate hikes is another step closer to being implemented.
This week, bipartisan legislation has made its way through the Senate which will help to place a delay on the premium hikes that will be experienced by hundreds of thousands of flood insurance customers who reside in low lying and coastal areas.
The vote of 86 to 16 showed that the support in the chamber that is powerful enough to avoid filibuster.
It is more than likely that this flood insurance delay will be passed by the chamber very shortly. This legislation will place a hold of up to four years for premiums increases that had been intended to be phased in next year for homeowners who are receiving subsidized policies. This will mean that the subsidies will be able to be passed on to homebuyers who purchase those properties.
The increases that are slated for the premiums are due to the recent federal flood insurance program changes.
These changes were made to the program just under two years ago. At the time, they had been greatly praised as reforms that were long overdue to the federal program. The goal of the changes was to help to make sure that the coverage program would be able to maintain its financial stability and to align the rates that were being charged with a closer reflection of what the actual flooding risk happened to be.
An official policy statement was also issued by the White House on Monday which failed to provide the legislation with its endorsement. That statement said that “Delaying implementation of these reforms would further erode” the financial position of the federal program. However, it also encouraged the implementation of relief to policyholders who were in economic distress.
That said, the new, massively higher flood insurance rates have generated a wave of sticker shock for hundreds of thousands of owners and potential home buyers who would face tremendously higher premiums as the updates of the flood maps occur over the years to come. As the subsidies will be lost when the properties are sold, it has threatened the value of homes due to the damper that has been experienced in the real estate market in which those homes are located.