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Insurance News for Business, Individuals and Families
Flood Insurance Rates Likely to Increase Soon for Most Policyholders
With all of the attention lately being focused on the implementation of the Federal government’s health care website debacle, the majority of Americans may not be aware that there is another battle brewing. Congress will soon be voting on whether or not to increase flood insurance rates that will affect most homeowners and businesses.
Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 that made changes to the way FEMA and other government agencies manage the National Flood Insurance Program. As a result of the new law, the Government is seeking premium rate increases that will affect the majority of policy holders that currently have flood insurance.
The National Flood Insurance Program was enacted into law by Congress in 1968 to provide homeowners, renters and businesses with protection from property damage due to floods.
Since most homeowner’s insurance policies do not offer flood insurance the majority of Americans must rely on the Federal government. This leaves Americans vulnerable to paying whatever price is set by NFIP.
There is bipartisan support from a group of senators pushing to delay Congress from increasing the rates for flood insurance. "There isn't a state in the country that isn't going to be affected," said Sen. Robert Menendez, D-N.J. "This is not a coastal issue. Every state suffers from floods.'' There are other members of congress, however, that say the increases are necessary to provide FEMA with adequate funds for flood claims.
Even if Congress votes to delay an increase in flood insurance rates it is inevitable that they will eventually rise. The Florida legislature is fast tracking a measure that will encourage competition from private insurance that will give Floridians more flood insurance coverage options without having to rely solely on NFIP.