Politics & Government

New Bill Introduced to Delay Flood Insurance Rate Hikes

Menendez bill would delay full unsubsidized rate for 10 years

When U.S. Sen. Bob Menendez joined Gov. Chris Christie days before Memorial Day weekend to declare the Belmar boardwalk open, he promised action on impending flood insurance rate hikes.

Last week, Menendez (D-N.J.) introduced the SHORE Act, short for the "Saving Homeowners from Onerous Rate Escalation" act.

The law would spread out the increases in flood insurance rates over 10 years – 5 percent for the first five years, and an additional 25 percent per year afterwards until full risk rate is reached for properties that would have had their subsidies phased out at 25 percent, per year, immediately.  

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It would apply to all properties, including secondary homes, in flood zones.

Flood insurance was de-subsidized in 2012 as part of the Biggert-Waters flood insurance reform law, a measure that was attached to a federal transportation bill and coupled with an extension of federal student loan subsidies.

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The law was controversial at the time, though primarily over the continuance of student loan subsidies, not the elimination of flood insurance subsidies. Menendez, as well as Sen. Frank Lautenberg (D-N.J.) who is a co-sponsor of the SHORE Act, voted in favor of passing Biggert-Waters.

But following Superstorm Sandy, Menendez has come out against the proposed rate hikes.

"There is no logical reason why New Jersey homeowners who weathered Superstorm Sandy and are struggling to put their lives together should lose the support of the federal government in keeping their home," said Menendez, in a statement. "The sharp premium increases that have already gone into effect are an unnecessary and cruel burden on those who have already borne enough hardship following Superstorm Sandy."

Last month, an amendment aimed at halting federal flood insurance rate hikes for five years was blocked in the U.S. Senate by Sen. Pat Toomey (R-Pa.).

Amendments in the U.S. Senate require what is known as "unanimous consent" before a vote can take place, meaning a single member can block a vote from occurring. But a bill, such as the one proposed by Menendez, cannot be stopped by single member of the chamber.

Homeowners could face annual flood insurance premiums of up to $31,000 a year under reforms included in the 2012 Biggert-Waters flood insurance reform law if they do not raise their homes to comply with updated flood maps. Raising a home could cost tens of thousands of dollars at a minimum. Some homeowners have said at public meetings that they are considering abandoning their homes since they cannot afford to raise them.

Homeowners in flood zones who have mortgages are normally required to carry flood insurance.

Many Shore area residents are hopeful that a delay can buy time for a FEMA flood insurance affordability study to be completed before rates change.

Updated FEMA flood maps, known as "working" maps, are due out in two to three weeks.


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