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Palazzo: House Flood Insurance Bill Means More Compassionate Rates, Certainty

Mississippi lawmaker praises bill bringing relief and reforms to NFIP policyholders

WASHINGTON, D.C. Congressman Steven Palazzo, (MS-4), today praised the House flood insurance reform plan, H.R. 3370, the Homeowner Flood Insurance Affordability Act of 2014. Palazzo is an original cosponsor of the legislation that was originally introduced in October 2013 and is scheduled for a vote on Wednesday, February 26th.

In a statement, Palazzo said: “We worked extremely hard to find the right balance with this legislation, and to deliver real relief and lasting reforms. This bill means more compassionate rates and more certainty for homeowners and communities facing unreasonable flood insurance increases. It represents exhaustive efforts over the past year to educate the public and my colleagues on these issues. And perhaps most importantly, it includes input from everyday Mississippians, community leaders and industry experts. I believe this bill is exactly what we need to ensure insurance remains affordable and available for those who need it, and I will do everything in my power to ensure its passage.”

In an announcement last week, House Majority Leader Eric Cantor commended Palazzo as a "tireless advocate" on flood insurance issues and cited him as "instrumental in working toward a solution." 

The House bill makes several key changes to the existing Biggert-Waters Act of 2012 without adding to the deficit. Among those provisions, it would repeal Section 207 of the law and restore grandfathered rates, making permanent Palazzo’s delay that was recently signed into law as part of the omnibus budget bill. This provision would also ensure that FEMA does not move the goal posts on those who built back to code after storms like Hurricane Katrina. 

"One of my biggest concerns has been that the current policy could punish Mississippians who went to great effort and expense and followed all the rules to build back after Hurricane Katrina," Palazzo stated. "Our new provision makes sure that does not happen." 

The bill would also give policyholders multiple options to manage and even reduce otherwise unreasonable premiums by allowing for higher deductibles, monthly payments, and expanding mitigation options. It also caps rate growth per year by changing the formula on which rates are based,which could result in thousands of dollars of reductions in yearly premiums for some homeowners.

The legislation also provides greater certainty for communities and real estate markets across the country. Under Biggert-Waters, homes lost grandfathered rates once a property was sold, resulting in drastic, overnight rate increases in some cases. The new legislation does away with home sale triggers, retroactively refunds home sale increases on pre-FIRM properties, and ties premiums to properties, not people.

Palazzo also pushed for inclusion of several measures to hold FEMA accountable. Those measures include requirements that the agency certify its mapping methodology, expedite an affordability study, reimburse policyholders who successfully appeal FEMA maps, and establish a flood insurance advocate. Further, FEMA will also be required to provide an affordability framework within 18 months after the affordability study is completed.  

Over the past year, Palazzo has pushed for  many measures similar to those announced in the most recent House bill, including slower phase-in rates for premiums and more compassionate flood insurance rates for grandfathered and subsidized properties as well as home sales. These were initiatives Palazzo first proposed in legislation he introduced in March 2013. He has also supported measures to hold FEMA accountable for faulty mapping practices, fast-track FEMA affordability studies, and protect homeowners who appeal faulty FEMA maps.

Palazzo serves as Vice Chairman of the Home Protection Caucus which he helped form in May 2013.