New measure could provide reprieve from flood insurance rate increases
Hundreds of thousands of homeowners in the U.S. could be facing higher flood insurance costs due to legislation that was passed last year. Earlier this week, however, a measure was introduced to the Senate that could give homeowners as much as a one-year reprieve from higher flood insurance rates. The measure has managed to gain strong support from legislators who believe it is in the best interests of consumers, many of whom have been suffering from the financial pressures associated with recent natural disasters.
Lawmakers continue to address problems with NFIP
Last year, federal lawmakers introduced sweeping reforms to the National Flood Insurance Program. This program has been in financial turmoil since 2005’s Hurricane Katrina and has taken up more than $24 billion in bailouts since it was first established in 1968. The program accounts for the majority of the flood insurance policies in the U.S. but has been put under harsh scrutiny recently for the trouble it has had dealing with 2012’s Hurricane Sandy, which caused one of the worst flooding disasters in U.S. history.
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Measure aims to reduce financial impact of rate increase
The measure would primarily benefit homeowners in flood prone states like Florida and Louisiana, as well as states that fall into FEMA‘s revised flood maps. Homeowners in these states would be exempt from flood insurance rate increases for one year, allowing them to either find an adequate alternative or prepare themselves financially. For states that are not accounted for by the measure, homeowners could see their flood insurance rates rise by as much as 25% next year.
Flood insurance continues to cause issues in the US
Flood insurance remains a problematic issue for the U.S., especially during hurricane season. Powerful storms often draw attention to the damage that flood can cause. One of the problems is the fact that the insurance industry in the U.S. tends to shy away from providing comprehensive flood insurance coverage due to the financial risks associated with such policies and the fact that certain states experience heavy rainfall and hurricanes on a regular basis.