Insurance rates may soon become chaotic due to changing flood maps and new legislation
Flood insurance rates are expected to begin fluctuating throughout the U.S. this year. Reforms are taking hold of the National Flood Insurance Program due to new legislation. The provisions of this legislation are delaying significant increases in insurance premiums for the time being, but the Federal Emergency Management Agency (FEMA), which oversees the federal insurance program, continues to make revisions to flood maps that are having a dramatic impact on the cost of insurance protection.
Arizona homeowners can expect to see cuts and increases in their insurance premiums
In Arizona, insurance rates for flood coverage are expected to fall for many homeowners. Those that have property in newly designated flood zones, however, are likely to see their flood protection become significantly more expensive this year. A reduction in flood insurance premiums is expected to be seen by homeowners in some parts of the state beginning in May, while increased rates for others will been seen later in the year.
Congress approves new legislation that will cap insurance rate increase
Earlier this week, Congress approved a new legislation that will curb any significant insurance premium increase in flood-prone areas of the country. In Staten Island, New York, this legislation may be enough to keep homeowners in their homes. The legislation introduces a cap to insurance rates, allowing rates to only increase by a maximum of 18% every year. This is significant because insurance rates had been growing by as much as 600% on a yearly basis.
Legislators consider abandoning federal insurance program
The legislation also includes provisions that would slowly eliminate the subsidies supporting the National Flood Insurance Program. A growing number of federal lawmakers are beginning to consider this program a burden to the country. The program has been crippled by debt for several years now and lawmakers have had trouble finding a solution to its financial problem. Legislators are now considering doing away with the program entirely and finding a new way to provide property owners with flood protection. In some states, flood insurance may soon be opened up to the private sector, allowing large insurance groups to take on the task of providing homeowners with the protection they need.