The New Flood Insurance Bill Passes Congress, Is Signed Into Law

We spoke previously about how Birmingham renters and homeowners could see lower flood insurance premiums as the result of an effort to overturn key parts of a previous law concerning flood insurance rates across the country. On Friday, March 21st, President Obama signed into law the Homeowner Flood Insurance Accountability Act, which – among other things – limited annual premium increases to a hard cap of 18 percent per year, which works out to just 15 percent on average compared to a previous increase of 20 percent per average. Homes can now be grandfathered into subsidized rates once more, something removed by the previous law, Biggert-Waters, which passed in 2012. Now, if your home complied with a flood map that was drawn up before Biggert-Waters called for new maps, you can have the same coverage – even if your home was put into a higher risk zone with the new maps. Also, homes that sell can transfer their subsidized policies to the buyer, instead of having the buyer have to pay for new coverage. This was a key point that many real estate professionals wanted emphasized, since higher premiums caused many potential buyers to balk at going through with a transaction. Owners who purchased a home after July 2012 can also get a refund for those who paid higher premiums after buying their homes. Finally, FEMA will now have to complete a feasibility study within two years that could further impact costs and coverage. Not all Birmingham homeowners and renters were affected, but those who were will likely be faced with lower premiums than the ones they have been paying for two years. For that reason alone, the new bill is a popular one in several parts of the country.