Flood Update: Homeowners Flood Insurance Affordability Act passes the Senate and moves to the President for Signature to become Law

Homeowners Flood Insurance Affordability Act passes the Senate and moves to the President for Signature to become Law

HB3370, Grimm/Waters Homeowner Flood Insurance Affordability Act of 2014, passed the Senate last night 72-22 and is anticipated to be signed by the President within the next 10 days.  


Although we anticipate the President will sign this bill, it may still be some time until FEMA and the NFIP implement the rules and procedures to offer the relief and refunds to affected policyholders.  At Wright Flood we will continue to work with the NFIP to assist in the implementation and will keep agents and policyholders informed through communications and website postings.


“This bill provides a compromise to bring relief to property owners and stability to the real estate market while still providing a path for the NFIP to reach actuarial soundness,” stated Patty Templeton Jones, COO Wright Flood.  “We understand that policyholders and their agents will be primarily interested in receiving any refunds and revised lower premium rates, however, the implementation of any refunds and revised rates from this bill is in the hands of FEMA and the NFIP for action.”


HFIAA14 directs FEMA and the NFIP to modify BW12  Flood Reforms already in place as well as to modify the future implementation of BW12 Flood Reforms. A Congressional Summary of HFIAA14 is available to read more.  We appreciate your interest and involvement in the political process, to see how your Senator voted, click here to see how your Representative voted, click here.  

Some important highlights include: 

  • Removes the sale of a property as a trigger to go directly to actuarial rates and establishes a glide path to reach actuarial rates through annual premium increase caps.
  • Requires FEMA to make refunds to policyholders with new policies after July 6, 2012 that were required to pay actuarial rates due to the BW12 Flood Reforms
  • Annual premium increases will be limited to a minimum 5% increase and a maximum 18% increase (under BW12 there was no minimum and there was a 20% maximum.)  
  • Establishes a surcharge for all pre-FIRM flood policies:  $25.00 per primary residences and $250 per policy for non-primary and non-residential properties.
  • Allows the Grandfathering rules in effect today within the NFIP to remain-by deleting  Section 10027 of the BW12 Flood Reform Act  
  • Maintains 25% premium increases for non-primary, business properties and severe repetitive loss properties. ( BW12 Section 1307 items A-E)
  • Re-establishes 50% home improvement level as the threshold for compliance with flood mitigation building practices.  (BW12 had lowered it to 30%)
  • Increases the funds available for the Affordability study to $2.5M
  • Requires FEMA to consult with the WYOs during the entire process of any upcoming changes.

Even after Presidential signature, FEMA will need some time to determine implementation plans and advise the WYO insurance companies of new flood policy rules and rates.

 Noah J. Bank

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