The Homeowner Flood Affordability Act of 2013, written by Senator Robert Menendez of NJ and Representative Michael Grimm of NY, has now passed the Senate and is on it’s way to the President’s desk to be signed into law.
This eases the some increases and changes that went into affect as a result of the Biggert Waters Flood Act. A more detailed rundown can be found on the Insurance Journal website, but here is a quick overview of changes that will help many homeowners along the Jersey Shore, and across the country for that matter.
First, it puts the maximum increase NFIP can impose at 18% per year, with some property classes having a 15% cap on increases. This is the maximum that NFIP can increase a policy each year.
The Bill also repeals both the property sales and new policy sales trigger. Under Biggert Waters, the home buyer and homeowner who are purchasing a new house, or new policy on their current house would immediately have to pay the full risk rate. Both of these provisions have been repealed, and in both instances, subsidized rates would still be available.
It also restores “grandfathering” and sets a hard cap on policy increases per year. This relieves property owners who were mapped into a higher zone from being forced to raise their houses or have higher rates phased in over 5 years.
There is also a slight change to the Reserve Fund that was set up as a result of Biggert Waters. Now a fee of $25 per policy for primary residence, and $250 per policy for a secondary residence will be imposed on all policies. This is changed from a 5% fee on all policies that Biggert Waters called for.
There are many other changes that this Bill addresses also. For a complete rundown, the article I mentioned above from the Insurance Journal is well worth the read. You can also click here to view the article.
Feel free to get in touch with our Insurance Dept. if you have any questions on how these changes might impact you.