We all remember that nightmare headline saying we could soon expect massive flood insurance rate hikes, and how the mayor and former mayor of the waterfront community of Nassau Bay were expecting premiums in the thousands.
Former Mayor Don Matter had seen his bill jump from $500 per year to $3,600 and was told to expect another 25 percent hike each year. Current Mayor Mark Denman was told his $800 annual fee would probably jump to $5,000 the first year.
But now better days are ahead as Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 which corrects much of the damage expected from the original Biggert-Waters Act, enacted in 2012 to reduce the flood insurance program’s estimated $30 billion debt.
The House passed the bill March 6 with the Senate following suit March 13. Afterwards, President Obama added his signature.
While the ultimate Reform Act involved a nationwide push, a great deal of the credit goes to our Bay Area Houston Economic Partnership, which realized the devastating consequences for thousands of people and businesses all across the country and quickly joined forces with the Coalition for Sustainable Flood Insurance to convince Congress to correct the problem.
BAHEP President Bob Mitchell and Marketing Director David Braun and other staffers first met with our area congressmen and began alerting the community. Unless something was done to reverse this congressional act, they explained, our communities would in the course of time turn into ghettos as one family after another – faced with unimaginable flood insurance fees they couldn’t pay – abandoned their homes.
The Bay Area would be harder hit than others because many of our cities are on the water and some such as Seabrook, Nassau Bay, El Lago, Taylor Lake Village, Kemah, League City, Bacliff and Galveston flooded during Hurricane Ike. All the cities around the area joined the fight.
“This legislation,” Mitchell said, “significantly changes the Biggert-Waters flood insurance law by addressing a number of unintended consequences stemming from the legislation. It reinstates grandfathered status for properties built to code before flood maps were adopted, allows new purchasers to assume existing flood policies when buying a property, and calls for accurate flood maps and gradual rate increases.
“It caps the maximum average annual rate increases at 15 percent, creates a new 5 percent minimum average annual rate increase for subsidized and grandfathered properties, caps the maximum annual premium increase at 18 percent of the prior year’s premium for all properties not subject to the higher 25 percent increase for second homes, commercial properties and severe repetitive loss properties.
“It also directs the Federal Emergency Management Administration to minimize the number of policies with annual premiums over one percent of the total coverage provided. The changes will be funded by a $25 surcharge on residential policies and a $250 surcharge on premiums for businesses and non-primary residences.”
Braun added, “The passage of the new bill goes a long way toward fixing the problems caused by BW-12. It no longer imposes drastic rate increases on those who have played by the rules, paid their policies on time, and whose houses and businesses have not flooded. I want to thank those members of Congress who recognized that fixing BW-12 was the right thing to do for the good of their constituents and the country.”
Mitchell was pleased to see both parties in Congress working together.
“To get this kind of bi-partisan support in Congress is outstanding. Everyone in the national coalition worked hard to get this done, and they should be very proud of such a major accomplishment. David Braun at BAHEP spearheaded the effort in Texas, and I want to thank him for the untold number of hours he spent to help get the legislation passed.”
And, we all thank you both and all who joined the fight for this major victory.
