Flood Insurance Rate Increase
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Many insurance companies have been working toward instituting a flood insurance rate increase recently. There are a number of lawmakers who have been actively trying to combat these increases, or at the very least to delay their implementation. Recent news indicates that one of the roadblocks that Congress members who are trying delay the flood insurance rate increase were trying to use, adding an amendment to a pending defense authorization bill, is no longer an option.

Negotiators from the House and Senate announced that they have reached an agreement on a defense authorization bill that they plan to put into effect before they break for the holidays. The proposal to delay the flood insurance rate increase for four years will not be considered, because the agreement made by the House and Senate on the bill precludes any amendments. Once the House passes the bill this week, the Senate’s only option is to pass the same bill the following week.

The defense bill is urgently important for Congress to pass, because it establishes the Pentagon policies and spending levels for the US military forces, which must be done before the year ends. The only way to pass the bill now is to pass over any amendments, which would require further deliberation.

The defense bill will authorize $552.1 billion in national defense spending, and an additional $80.7 billion for Overseas Contingency Operations. The bill also includes a 1 percent pay raise for military personnel.

Additionally, the bill reforms the military’s current structure for handling sexual assault cases, and restricts military commanders from overruling a court martial’s findings.

Congress members who are working toward delaying the flood insurance rate increase have voiced that though this channel has been blocked, their efforts will continue. Adding their issue as an amendment to the defense bill was only one of their options to bring their motion to Congress, so now they’ll just have to choose a different path.

Their intentions in passing this legislation are to delay the flood insurance rate increase for four years, and to force FEMA to complete an affordability study during those four years. This legislation is meant to help the following groups:

  • Homes and businesses that are currently considered “grandfathered.” This means that the properties were built to the code at the time, but then remapped into a higher-risk area later. Before the Biggert-Waters 2012 legislation, policyholders who own these properties weren’t penalized for relying on inaccurate FEMA flood maps.
  • Policyholders who purchased new policies for their properties after July 6, 2012, before they were legally required to purchase insurance.
  • New homeowners and business owners who purchased properties after July 6, 2012. These property owners will be treated the same as previous owners, unless a provision of the Biggert-Waters legislation is triggered, such as being compensated for severe repetitive losses for the property.