Bill passed in the House of Representatives. Under current regulation, home owners who choose to purchase flood insurance within the private market rather than through the National Flood Insurance Program are permitted to, however they could face higher rates if they come back to the NFIP, based on the National Association of Realtors.
Flood insurance bill could bring relief to homeowners
A new bill, H.R. 2109 or Flood Insurance Market Parity and Modernization Act, which passed today in the House of Representatives by a vote of 419 to zero, seeks to relieve the problem. “Realtors know that a robust National Flood Insurance Program is important for protecting consumers and ensuring property sales can move forward in 20,000 communities nationwide,” said NAR President Tom Salomone, broker-owner of Real Estate II in Coral Springs, Florida. “For many, the NFIP offers the only source of coverage that meets federally-related mortgage requirements and protects properties in the 100 year floodplain.”
“At the same time, consumers who wish to purchase insurance in the private market should have the freedom to do so,” Salomone said. “This legislation will help foster a vibrant private flood insurance market while giving consumers the flexibility to return to the NFIP at a reasonable cost if they choose to.”
Currently, the NFIP requires homeowners to possess a minimum amount of flood insurance to maintain the lowest available rates, but consider moving to private insurance a break in coverage.
When homeowners come back to the NFIP, in many cases after the rates increase on their private insurance or whether it is no longer available, according to NAR. At that point, homeowners would face a rise in their rate.
The new bill will permit homeowners to keep the low rate provided that the private insurance they changed to met state requirements.
If Freddie Mac is going to be believed, according to its April 2016 Insight report, more change needs to come soon to the housing insurance market, or climate change could become the next major disruption to flood insurance.
Nick & Cindy Davis work with several insurance providers here in the Tampa Bay area that can assist you if you need to evaluate your current flood insurance policy. Feel free to call us at 813-300-7116 or simply click here and we can give you their contact information.