Menendez, Isakson Lead Bipartisan Coalition to Protect Homeowners From Flood Insurance Rate Spike


Homeowner Flood Insurance Affordability Act Comes on One Year Anniversary of Superstorm Sandy

WASHINGTON, D.C. – October 31, 2013 – (RealEstateRama) — On the one year anniversary of Superstorm Sandy, U.S. Senators Robert Menendez (D-NJ) and Johnny Isakson (R-GA) today led a bipartisan coalition of members to introduce the Homeowner Flood Insurance Affordability Act which will protect millions of homeowners from facing huge flood insurance premium rate hikes and require FEMA to complete an affordability study, propose real solutions to address affordability issues, and certify that their mapping process is accurate before any flood insurance premiums can be raised in the future. The bill is co-sponsored by Senators Thad Cochran (R-MS), Mary Landrieu (D-LA), David Vitter (R-LA), Chuck Schumer (D-NY), Bill Nelson (R-FL), Jeff Merkley (D-OR), Mark Begich (D-AK), Kirsten Gillibrand (D-NY), John Hoeven (R-ND), Al Franken (D-MN), Elizabeth Warren (D-MA), Heidi Heitkamp (D-ND) and Ed Markey (D-MA).  Congresswoman Maxine Waters, along with Congressmen Michael Grimm, Cedric Richmond and 34 others are introducing a companion bill in the House of Representatives.

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The Menendez-Isakson “Homeowner Flood Insurance Affordability Act:”


The short title is the Homeowner Flood Insurance Flood Affordability Act.


Defines key components of the draft affordability regulations FEMA is required to propose to Congress after completing the affordability study as well as key elements in the flood mapping process.  Additional provisions included in this section will ensure that homeowners with flood-proof basements will continue to receive credit for this investment when their rates are calculated.


Delays the implementation of rate increases on the following three types of properties until FEMA meets two requirements:   1) completes the affordability study mandated by the Biggert-Waters Flood Insurance Reform Act of 2012, proposes a draft affordability framework for Congressional review, and Congress has a chance to give FEMA affordability authority; and 2) the FEMA Administrator certifies that the agency has implemented a flood mapping approach that utilizes sound scientific and engineering methodologies to determine varying levels of flood risk in all areas participating in the National Flood Insurance Program.:

  1. All homes and businesses that are currently “grandfathered.”  These are properties that were built to code and later remapped into a higher risk area.  Prior to Biggert-Waters, these policyholders were not penalized for relying on inaccurate FEMA flood maps.
  2. All properties that purchased a new policy after July 6, 2012, before they were legally required to purchase insurance.
  3. All properties sold after July 6, 2012.  New homeowners and business owners will continue to receive the same treatment as the previous owner unless they trigger another provision in Biggert-Waters such as Severe Repetitive Loss, non-primary residence, substantial damage, etc.

The measure requires FEMA to propose a draft regulatory framework to address any affordability issues identified by the study within 18 months after the completion of the study and establishes a six month period thereafter to provide for Congressional review.  The House and Senate would then hold up or down votes through a privileged motion on giving FEMA the authority to propose regulations in accordance with the regulatory framework.  If Congress approves this authority, the targeted freeze promulgated by this bill would continue until regulations are finalized.  If not, the freezes would be lifted absent other Congressional action.

Affordability measures addressed by the draft regulatory framework may include targeted assistance to individual policyholders and may consider the negative effects of rate increases and map changes on program participation.  FEMA has estimated it will take twoyears to complete the affordability study before a draft regulatory framework can be provided to Congress.


Requires FEMA to complete the affordability study required by Biggert-Waters within two years of the date of enactment of this bill.


Lifts the arbitrary $750,000 cap on the affordability study to ensure FEMA has the funding required to complete it within  two years of the date of enactment.


Allows FEMA to utilize the National Flood Insurance Fund (NFIF)  to reimburse policyholders who successfully appeal a map determination.  FEMA currently has the authority to reimburse homeowners for successful appeals of map findings, but Congress has never appropriated funding for this purpose.  Making appeal reimbursement an eligible expense of the NFIF would give FEMA the incentive to “get it right the first time” and repay homeowners for contributing to the body of flood risk knowledge.  Unsuccessful appeals would not be reimbursed in any way.


FEMA’s AR and A99 flood zone categories provide more affordable flood insurance to qualifying communities that are in the process of levee construction, reconstruction, and improvements.  Current regulations require a certain level of federal participation to qualify for either an A99 or an AR designation, and therefore prevent FEMA from giving communities fair credit for improvements made to existing flood control systems.  Proactive communities that invest in mitigation should not be penalized for self-financing flood protection projects.


Preserves the pre-Biggert-Waters basement exception to ensure that homeowners who have floodproof basements receive credit for that flood proofing when their flood insurance rates are calculated. This affects 54 communities nation-wide where basements are necessary to protect homeowners from extreme weather.  Basements that have not been flood-proofed would remain subject to the effects of Biggert-Waters.


Establishes a Flood Insurance Advocate within FEMA to answer current and prospective policyholder questions about the flood mapping process and flood insurance rates.  The Flood Insurance Advocate will be responsible for educating policyholders about their individual flood risks, their options in choosing a policy, assisting property owners through the map appeals process, and improve outreach and coordination with local officials, community leaders, and Congress.

What members are saying:

Sen. Robert Menendez (D-NJ) said:

“As we continue to recover from the worst natural disaster in our state’s history, a manmade disaster is looming, jeopardizing that recovery.  The combination of new flood maps and phase out of premium subsidies for the National Flood Insurance Program threatens to force victims out of their homes and to destroy entire communities.  Many homeowners will have to pay premiums they simply cannot afford, forcing them to either sell or abandon their homes.  These are hardworking middle class families, who played by the rules, purchased flood insurance responsibly, and are now being priced out of their own home.  We must stop this manmade disaster from doing more damage, take a time-out and assess the impact these premium hikes will have on homeowners and the communities they live in.”

Sen. Johnny Isakson (R-GA) said:

“I’m proud to join my colleagues in a bipartisan effort today to protect Americans from sudden, steep increases in their annual flood insurance premiums as a result of the Biggert-Waters law. Without action, many homeowners in costal and flood plain areas in Georgia and elsewhere will experience unaffordable premiums that will cause some owners to lose their homes. Also, this law has the unintended consequence of causing the value of homes for sale in these areas to drop. I’m pleased that our bill also requires the Federal Emergency Management Agency to complete an affordability study using the latest technology to ensure that flood insurance is affordable for homeowners and the program is self-sustainable going forward.”

Sen. Mary Landrieu (D-LA) said:

“One year ago today Sandy hit the east coast, ravaging homes, businesses and communities. Today, a bipartisan coalition is here to tell the 5.5 million policy holders across the country and nearly 500,000 in Louisiana that we have a solution. The Homeowner Flood Insurance Affordability Act delays the most dangerous rate increases under Biggert-Waters until FEMA proves its flood maps are accurate and understands the impacts these drastic rate increases will have on individual policy holders and the program at large.  This legislation is about fairness and building a future our communities can count on. Our coalition of business groups, non-profits, local leaders and bipartisan members of congress continues to grow every day and we will keep pushing until this bill becomes law.”

Sen. David Vitter (R-LA) said:

“Without a change, flood insurance is simply going to be unaffordable for middle class families,” Vitter said. “Homeowners will literally have to turn in their keys and in some cases walk away from their homes. In coastal Louisiana, we’re on the tip of the spear and we’re experiencing this first. But this is not just a Louisiana issue – it’s going to affect folks across the country.”

Senator Jeff Merkley (D-OR) said:

“Something is very wrong when middle class families across Oregon and America are more worried about extreme spikes in flood insurance than about actual floods. This must be remedied. We can strengthen the long-term health of the program without pricing families out of their homes.  I am pleased that last month’s hearing helped mobilize a bipartisan coalition committed to giving homeowners relief.”

Sen. Kirsten Gillibrand (D-NY) said:

“This important, bipartisan bill would postpone the potentially disastrous flood insurance rate increases coming into effect as a result of the Biggert-Waters flood insurance reform law,” said U.S. Senator Kirsten Gillibrand. “Some homeowners – even as they rebuild – have started seeing rates increase. This could cause many New Yorkers to be forced out of the homes and communities they love. This bill would simply delay the premium increases set to go into effect until after FEMA has completed a study and provided Congress with a plan to make rates more affordable. Our families working so hard to rebuild deserve nothing less.”

Sen. John Hoeven (R-ND) said:

“North Dakotans and people across the country need fair and affordable flood insurance rates,” said Senator Hoeven. “This bipartisan legislation ensures that FEMA completes an affordability study before raising flood insurance rates for Americans. It also includes an important provision that ensures communities in North Dakota and across the country are able to continue using floodproofed basement credits when determining premiums. We need to make certain that Americans have affordable flood insurance that works for our communities.”

Sen. Heidi Heitkamp (D-ND) said:

“Flooding is too often a reality for so many North Dakotans and earlier this month, flood insurance rates went up for millions of families, putting them at risk if they aren’t able to pay the higher cost,” said Senator Heitkamp.  “Today’s bipartisan bill would reverse this course and make sure that homeowners are able to get the affordable flood insurance they deserve to protect them and their families.  It also includes a crucial provision that impacts many North Dakotans who have proactively flood proofed their basements.  The bill makes sure these homeowners won’t see their flood insurance rates spike to unaffordable levels when they have already gone above and beyond to mitigate their flood risk.”

Sen. Ed Markey (D-MA) said:

“One year ago today, Superstorm Sandy destroyed homes and businesses along the Atlantic coast.  But the costs of stronger storms and more frequent flooding should not be borne by those that are least able to afford it, including innocent business and homeowners in Massachusetts. This bipartisan legislation will ensure that we have addressed the affordability of the flood insurance rate increases before any crippling flood insurance rate increases go into effect. I thank my colleagues, especially Senators Menendez, Isakson, Landrieu and Merkley, for their leadership on this issue.”

Rep. Maxine Waters (CA-43) said:

“The Biggert-Waters legislation was designed to address a $24 billion deficit and ensure millions of American homeowners could continue to purchase flood insurance. But FEMA’s poor implementation, inaccurate mapping and incomplete data has led to unreasonable and unimaginable increases in premiums. From the moment I learned of the unintended consequences of the Biggert-Waters legislation, I have made clear that I would lead the effort to resolve the problems that have resulted,” said Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee. “Today we have reached bipartisan, bicameral agreement on the best way to repair the National Flood Insurance Program. This legislation would ensure FEMA undertakes program changes in a way that will not cause harm, by delaying implementation until it provides Congress the facts on how rate increases will affect homeowners. It will also give us the information we need to go through the program piece-by-piece and fix any outstanding affordability issues.”

Rep. Cedric Richmond (LA-02) said:

“Today, I join my House and Senate colleagues to continue the fight to make flood insurance affordable. We cannot allow Louisiana’s homeowners to face these massive, unaffordable increases alone,” Congressman Richmond said. “Flood insurance increases have sent shockwaves up and down the coastal regions and through the heartland of our country. I’m happy to join my colleagues in drafting this legislation that will provide a sustainable, long-term solution that will allow people to buy and sell homes without penalty. This effort transcends party affiliation and reaches down to the core of our purpose in Congress, which is to draft legislation that protects our constituents. For Louisiana’s communities bearing the brunt of these insurance hikes, today is a big step toward a solution.”

Rep. Michael Grimm (NY-11) said:

“Homeowners across the nation have been hit with skyrocketing flood insurance rates, which they simply cannot afford,” said. Rep. Grimm. “On Staten Island, this is an unbearable blow that further victimizes those who are still struggling to recover from Superstorm Sandy.  I am proud to be part of bipartisan, bicameral solution to delay the rate hikes, while improving the Biggert-Waters Act in ways that protect homeowners from financial burdens and maintain the solvency of the National Flood Insurance Program.”


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