Flood Insurance Update 2014

As many of you are now aware, in July of 2012, the U.S. Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (“Biggert-Waters”) in order to address the National Flood Insurance Program’s (NFIP) $24 billion dollar debt.  The new law changed major components of the NFIP, including flood insurance, flood hazard mapping, and the management of floodplains. 

As a result, Biggert-Waters has driven up flood insurance premiums, which has had a negative impact on real estate sales in Southwest Florida.

Well, good news is on the way!  On Tuesday, March 4, 2014, the House of Representatives passed H.R. 3370, the Homeowner Flood Insurance Affordability Act, which is commonly referred to as the Grimm-Waters bill (“Grimm-Waters”).  Grimm-Waters reverses some of the changes to the NFIP introduced by Biggert-Waters. 

Significantly, Grimm-Waters would provide retroactive refunds for people who have had large flood insurance rate increases due to the sale or purchase of a home, cap average annual premium increases at 15 to 18 percent and allow subsidies for insurance rates that are based on current flood maps.  Essentially, Grimm-Waters will provide buyers and sellers of homes in flood-prone regions with clarity on the cost of their insurance, which will in turn help with their ability to buy or sell a home. 

The question now is whether the Senate, which passed legislation delaying most of the premium increases for four years, will pass Grimm-Waters, or seek to negotiate differences between the two bills.  Berlin-Patten is committed to providing our followers with the most current information and will continue to keep you informed as the Flood Insurance laws continue to develop. 

As always, if you have any specific questions regarding the current Flood Insurance laws, please reach out to your local real estate attorney.            


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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