Last year, Congress enacted the Biggert-Waters Flood Insurance Reform Act of 2012 to extend the National Flood Insurance Program (NFIP) for five years while enacting reforms to help address the program’s $24 billion debt load. The reforms were designed to return NFIP to solvency by phasing in revised pricing on the nearly 20 percent of all policyholders who pay a subsidized rate. Absent this national program, many apartment owners would likely not have access to flood insurance, since the private market has never stepped into this space in a meaningful way.
However, as the reforms have begun to be implemented, many property policyholders recently have objected to significant, if not unrealistic, price increases when they renew their policies, transfer properties or are mapped into a riskier flood zone. Recognizing the unintended consequences associated with the program rollout, Congress has responded by acting to delay these new price increases.
Bipartisan bills have been introduced in both the House and the Senate to delay the flood insurance rate increases for most policyholders, excluding second homes and businesses, for up to four years. Apartment properties are not considered businesses under the program and, therefore, are expected to benefit from this relief. Additionally, the extension legislation requires the Federal Emergency Management Agency to conduct a study on affordability challenges and propose alternatives to the rate hikes.
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- NMHC and NAA Letter to House Financial Services Regarding NFIP - June 2019
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