FEMA is issuing $100 million in insurance refunds to homeowners throughout the US
The U.S. Federal Emergency Management Agency (FEMA) is issuing some $100 million in flood insurance refunds to policyholders receiving coverage through the National Flood Insurance Program (NFIP). The agency is issuing refunds to those that have overpaid for their coverage due to the provisions of the Biggert-Waters Act, a legislation that caused a significant spike in insurance premiums over the past year. The initial wave of refunds should begin on October 1 and the last refunds are likely to be issued by the end of the year.
Refunds come courtesy of the Homeowners Flood Insurance Affordability Act
Refunds are coming to policyholders because of the Homeowners Flood Insurance Affordability Act, which was passed by Congress earlier this year due to complaints regarding previous flood protection reform. Initial efforts to reform the country’s flood protection program were lackluster and did little to resolve the financial problems that NFIP has been trying to overcome for years. Some provisions of the Biggert-Waters Act placed homeowners under a significant degree of financial stress due to the growing cost of their insurance coverage.
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1 million homeowners will receiving refunds from FEMA this year
According to FEMA, refunds for policyholders will range from a few dollars to as much as $10,000. The average refund is expected to hover in the $100 range. Refunds will be issued in numerous ways, including credit on existing flood insurance policies. The refunds are being issued to those that purchased homes after the passage of the Biggert-Waters Act in June 2012. An estimated 1 million people will be receiving these refunds.
Refunds are coming, but federal law is still making flood insurance more expensive
While some homeowners will be getting refunds, flood insurance coverage is still slated to become more expensive in the future. Federal law calls for the gradual increase of insurance coverage over the next several years. Law allows for flood protection premiums to grow by 5% to 15% in any given year, but rate increases cannot exceed 18%. This is lower than the rate increases that have hit homeowners in previous years.