Insurance rates continue to skyrocket in the US
Flood insurance rates are on the rise throughout the U.S. and Congress has been feeling the pressure from homeowners and consumer advocacy groups concerning their inaction on the matter. The reason rates are growing has to do with a law passed in 2012 meant to fix the National Flood Insurance Program (NFIP). The federal program is typically the only place where homeowners can acquire flood protection. The law passed in 2012 is meant to rectify the financial problems that have crippled the federal program for the past several years.
Reform law creates more problems than it solves
The Biggert-Waters Flood Insurance Act of 2012 was designed to address the flood insurance program’s $28 billion deficit, but has made little progress in this endeavor. The federal program is managed by FEMA, which has been revising its flood maps, placing large communities in so called “danger zones” and increasing their flood insurance rates. Some lawmakers have introduced legislation to delay or change the provisions of the reform law, but property owners are still feeling the weight of higher insurance rates as the majority of Congress opts for inaction.
Lawmaker intends to repeal reform law
U.S. Representative Thomas Marino, who had voted in favor of the reform law in 2012, now wants to see the law repealed because “there is no fix.” Marino claims that the law, as it is currently, cannot be salvaged and will only lead to higher flood insurance rates and financial damage. According to Marino, the better option is to repeal the law entirely and start building a new reform law from scratch.
Flood insurance is having an impact on the housing market
Marino notes that homeowners have little understanding concerning federal flood insurance protection and how it is being affected by arbitrary politics. Moreover, higher flood insurance rates and FEMA’s revised flood maps are having a dramatic impact on the housing market. In some parts of the country, homes in newly designated high-risk communities have lost $1 billion in collective value.