WASHINGTON (July 23, 2014) – Congressional action and the timely implementation of the Homeowner Flood Insurance Affordability Act relieved property owners of costly premium hikes and stabilized housing markets where flood insurance is required for a mortgage, said the National Association of Realtors® today in testimony before the U.S. Senate Appropriations Subcommittee on Homeland Security. There are additional steps that need to be taken, however, to fully address remaining issues.
“The Federal Emergency Management Agency appears determined to get implementation right,” said NAR Flood Insurance Task Force Chair Donna Smith, broker-in-charge of Berkshire Hathaway Home Services, C. Dan Joyner Realtors® in Greenville, South Carolina. “In the four months since the law’s enactment, FEMA Administrator Craig Fugate and Director David Miller have engaged Realtors® and other stakeholders to ensure a successful rollout of the law’s rate relief and refund provisions for property owners, who are still reeling from the wide swings in insurance costs over the past few years.”
Within a month of the legislation’s implementation, FEMA issued rate-relief guidelines to insurers so that homebuyers would not have to pay more than current owners would at the time of their next flood insurance policy renewal. The relief also applies to current homeowners who bought a new policy or let one lapse, not just to owners who bought property after the Biggert-Waters Flood Insurance Reform Act went into effect last year.
Within two months of implementation, FEMA announced its intention to hold 2013 rates constant through 2015 and in some cases even reduce rates. The agency has also provided guidance to insurers to issue refunds this fall to property owners who paid amounts in excess of 2013 rates.
“The progress so far has been encouraging, but there is still more work to be done,” said Smith. “FEMA still needs to set up an Office of the Advocate called for by the Biggert-Waters Act to provide property buyers with the timely help they need to address problems with flood insurance and other rate issues that they face. It is also critical that FEMA and the NFIP ensure the long-term accuracy of flood rates and maps. Homeowners need an independent government advocate who has experience and access to the necessary information to fully investigate and resolve suspect rate quotes.”
NAR looks forward to keeping the dialogue open and working with FEMA to build on the positive early efforts happening only four months after implementation of NFIP reforms.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.