A group of U.S. representatives from New York are proposing a bill that would stretch out the National Flood Insurance Program’s premium increase timeline.
On Monday, U.S. Reps. Michael G. Grimm (R-N.Y.), Gregory Meeks (D-N.Y.), Reps. Charles B. Rangel (D-N.Y.), Rep. Eliot Engel (D-N.Y.) and Rep. Jerold Nadler (D-N.Y.) announced the introduction of H.R.960, the Flood Victim Premium Relief Act of 2013.
The lawmakers said the legislation is designed to ease what they described as “the burden of skyrocketing flood insurance rates” on victims of Superstorm Sandy. The bill would extend the premium increase timeline for primary residences in areas that have been declared a federal disaster area after July 6, 2012 from five years to eight years.
Under the Biggert-Waters Flood Insurance Reform Act of 2012, the maximum rate increase the National Flood Insurance Program (NFIP) could impose in a given year was raised from 10 percent to 20 percent. This was done as an attempt to bring the heavily indebted program back to solvency over time. H.R. 960 would slow the rate of increase in declared disaster areas for the first four years after a remapping from 20 percent per year to 5 percent per year — with rates in years five through eight returning to the original 20 percent-a-year increases.
“Given the massive destruction faced by victims of Superstorm Sandy, with many having their lives completely upended both emotionally and financially, this bill is vitally important,” said Rep. Grimm.
“If we allow flood premiums to increase on their current schedule, based on the new maps, homeowners are going to be in an impossible position of trying to both pay their mortgage as well as increased flood premiums that may rise over $10,000 in some cases,” Rep. Grimm said.
“This situation will almost certainly lead to a surge in defaults and foreclosures and cost the taxpayers vast sums via the government’s exposure to Fannie Mae, Freddie Mac and the FHA. Allowing an extra three years to increase premiums will give both homeowners and localities time make smart, long term flood mitigation and rebuilding plans.”
Rep. Meeks added that “not a day goes by that my office is not making a call to a bank or an insurance company on behalf of my constituents who were deeply affected by the storm. This premium relief bill will give some relief from the tremendous cost of rebuilding their lives.”
Rep. Grimm’s bill has been introduced with original cosponsors Reps. Gregory Meeks (N-N.Y.), Peter King (R-N.Y.), and Carolyn McCarthy (D-N.Y.). The legislation has gained the support of other members of the New York City Congressional delegation and is cosponsored by Reps. Jerrold Nadler (D-N.Y.), Charles Rangel (D-N.Y.), Joseph Crowley (D-N.Y.), Eliot Engel (D-N.Y.), Grace Meng (D-N.Y.), and Hakeem Jeffries (D-N.Y.).
This article originally appeared on Insurance Journal, a Wells Media sister publication.