New homes built at elevations required by the Federal Emergency Management Agency will not see the flood insurance premium increases expected to hit existing homes at lower elevations. But a new bill approved by Congress limits the potential increases.
In a 72-22 vote on Thursday, the U.S. Senate approved a bill that would limit the looming increases to flood insurance premiums that had been promised with passage of a 2012 reform bill.
The measure would permit sellers to give subsidized insurance rates to new buyers, and it would cap premium increases at 18 percent annually.
The House of Representatives had approved the bill in a 306-91 vote on March 4, and President Barack Obama is likely to sign it into law.
The bill moderates much of the 2012 Biggert-Waters Flood Insurance Reform Law, which was designed to end taxpayer subsidies of the heavily indebted National Flood Insurance Program.
Among the highlights of the new bill:
- Premium increases between 5 percent and 18 percent annually until full-risk coverage is reached. (Biggert-Waters included 25 percent increases.)
- A new assessment of $25 per year on primary residence policies and $250 per year on business and non-primary residence policies.
- Removal of an automatic trigger to full-risk coverage rates upon the purchase of a home for primary residences.
