On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law.  The bill repeals and/or modifies many of the provisions of the Biggert-Waters Flood Insurance Reform Act of 2012, which should come as a welcomed relief to many of the homeowners and real estate professionals in our community. 

Significantly, the Homeowner Flood Insurance Affordability Act will lower the recent rate increases on some policies, prevent some future rate increases, and implement a surcharge on all policy holders.  The Homeowner Flood Insurance Affordability Act will also repeal certain rate increases that already went into effect and provide refunds of the excess premiums that policyholders were charged pursuant to the requirements of the Biggert-Waters Act.  The key provisions of the Homeowner Flood Insurance Affordability Act are the following:


    • Refunds will apply to policyholders in high-risk areas who were required to pay their full-risk rate after purchasing a new flood insurance policy on or after July6, 2012.
    • Refunds may apply to policyholders who renewed their policy after the Homeowner Flood Insurance Affordability act was enacted on March 21, 2014 and whose premium increased more than 18 percent.
    • Refunds will not apply to policyholders paying the 25 percent annual rate increases as required by Congress in the Biggert-Waters Act, for Pre-FIRM subsidized non-primary residence, business, severe repetitive loss property, or building that was substantially damaged or improved.

Premium Rate Subsidized Policies:

    • The new law requires gradual rate increases to properties now receiving subsidized rates instead of immediate increases to full-risk rates required under the Biggert-Waters Act.
    • With limited exceptions, flood insurance premiums cannot increase more than 18% annually.
    • Polices for the following properties will continue to see up to a 25% annual increase as required by Biggert-Waters until they reach full-risk rate:
      • Older business properties
      • Older non-primary residences
      • Severe repetitive loss properties

New Surcharge on all Policies:

    • A new surcharge will be added to all policies to offset the subsidized policies.

It is important to note that the above-referenced modifications will not be implemented immediately as FEMA has stated that it will take time to roll out the new law. As always, if you have any specific questions regarding the current Flood Insurance laws, please reach out to your local real estate attorney or insurance provider.            



Berlin-Patten, PLLC


This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.


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