The new “Homeowner Flood Insurance Affordability Act,” HR
3370 passed earlier this year should resolve most
of the unintended consequences due to implementation issues with the
Biggert-Waters Act of 2012.
Repeals FEMA’s authority to raise flood insurance rates
at the time of property sale.
Returns to allowing buyers to assume the seller’s current
rates so the rate stays/transfers with the property, not the owner.
Restores grandfathering so properties built and
maintained to code in one flood zone are not rated in a higher cost zone,
simply because FEMA corrects the mis-rating on a later flood map.
Caps premium increases at 18% annually for new properties
or 25% for the older ones.
Refunds premiums paid by property owners in excess of
rates under these amendments.
As amended, the law will still eliminate the rate
subsidies, except that under these amendments, none of the 20% of owners will
pay more than 25% a year -- even if someone buys the property. No more
dramatic, upfront increases at the closing table. All increases will be capped
and occur once a year when flood insurance is renewed. To avoid further
borrowing from taxpayers, a small assessment is placed on all NFIP policies
until property owners are paying full cost for flood insurance.
To prevent inaccurate rate increases in the future, the
Requires technical review and certification of the flood
insurance rate maps.
Creates a flood insurance advocate for property owners to
challenge faulty rates or maps.
Increases funding to reimburse property owners for
successful flood map appeals.
Reduces rates based on flood-proofing or other
alternative methods to elevating property.
Provides for a higher deductible up to $10,000 before
flood losses are covered by insurance.
If any affordability issues remain in 18 months,
particularly for low value homes, non-profits, churches, or small businesses,
FEMA is to report to Congress and propose additional solutions, like
While the bill has been signed into law, FEMA must now
implement the changes via rulemaking before property owners will see the rate
relief and refunds.
Flood maps are being redrawn for some areas – see FEMA Preliminary
Mapping Information for NYS
Courtesy of National Assoc. of Realtors