As real estate brokers on the coast of North Carolina, we are acutely aware of the importance of protecting both the beaches and homeowners living on or near the beach. Owners realize the inherent risks associated with living near the water and have paid for insurance accordingly. However, the passage of the Biggert-Waters Flood Insurance Reform Act in 2012 calls for huge insurance premium hikes in response to minimizing some of FEMA’s debt.
Realizing that Biggert-Waters has several major flaws and is a short-sighted response to the debt issue, the Senate voted 67-32 on January 30 for the Homeowner Flood Insurance Affordability Act of 2014 that will delay implementation of the Reform Act until 2017.
The Senate bill addresses 2 key issues:
Ø Allows Federal Emergency Management Agency (FEMA) time to complete its affordability study and refines its flood maps.
Ø Allows for “grandfathering” of current premiums for homeowners affected by a remapped flood zone.
Our advocate in the Senate, Kay Hagan, included an amendment in the bill to address the fact that borrowers with certain types of residential loans (e.g., loans to buy a property like a condo that is covered by previously-existing master policy or second mortgages), are forced to escrow flood insurance premiums more than once or have to submit proof to a lender regarding existing coverage (as required by Biggert-Waters).
As it stands, rate hikes have been delayed until the end of 2014 with the passing of the Act in the Senate.
But, without the House of Representatives’ approval, it is unclear how the issue will be resolved in the short and long-run.
We’ll keep you up-to-date on this issue and all things related to real estate in the Wilmington/Wrightsville Beach area. .
By Maya Schultz