Bill would slow NFIP premium increases
Legislation to ease the impact of planned National Flood Insurance Program (NFIP) premium increases has been introduced in the U.S. House.
Representative Frank LoBiondo (R-NJ) outlined his bill (H.R. 1485) in remarks delivered in the coastal city of Brigantine, NJ on April 15. Under H.R. 1485, the rate of flood insurance premium increase would be slowed to 12.5% each year for eight years. This rate of premium increase would allow NFIP premiums to still reach "full-risk cost without continuing the taxpayer subsidy, but easing the immediate financial impact to Jersey Shore residents and others still rebuilding from Hurricane Sandy," LoBiondo said.
The changes would not only apply to Sandy impacted areas, however. The changes would impact flood-prone areas nationwide.
The lawmaker in a release noted that the Federal Emergency Management Agency (FEMA) has historically charged NFIP premiums of around 40% to 45% of full cost on mortgages for homes in flood-prone areas. Taxpayers subsidize the remaining costs of flood insurance coverage. The Biggert-Waters Flood Insurance Reform Act of 2012, which was signed into law on July 6, would increase these NFIP premiums by 25% per year over a four-year period in a bid to phase out government-subsidized flood insurance. The premium increases do not impact NFIP policies on primary residences.
In that same statement, Lobiondo said his bill "appropriately balances the goal of making the NFIP solvent with the real financial concerns of those facing steep premium increases and protecting the taxpayers' interest." Representative Jon Runyan (R-NJ) is an original cosponsor of the bill, which was introduced on April 11.
The NFIP was established in 1968 and is intended to protect homes and businesses from financial ruin when flooding occurs.