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U.S. responds to flood insurance cost complaints

 

WASHINGTON – March 11, 2016 – Congresswoman Maxine Waters asked the U.S. Government Accountability Office (GAO) if it could find ways to help homeowners afford flood insurance after rates rose higher over the past few years. She made the request after the Federal Emergency Management Agency (FEMA) failed to complete a congressionally mandated affordability study.

Waters, ranking member of the House Financial Services Committee, made her request in 2014 and GAO recently completed its report. While higher flood insurance rates were mandated by the 2012 Biggert-Waters Flood Insurance Reform Act, she said the nation lacked an understanding of the impact those increases would have on flood insurance affordability.

According to Waters, the GAO and FEMA reports "confirm what was feared all along: FEMA does not have the income or flood-risk data to be able to inform Congress's decisions on affordability assistance."

The 2014 Homeowner Flood Insurance Affordability Act (HFIAA) called for "a substantive study of affordability … and included a new requirement for FEMA to follow the study with an affordability framework that includes proposals and proposed regulations for ensuring flood insurance affordability among low-income populations," Waters said in a statement. "To date, no affordability framework has been submitted."

Citing "an information gap" at FEMA, Waters said the lack of data "is an impediment to enacting meaningful reforms to provide further relief to those who need it most." She said the just-released report suggests workable solutions, but "Congress cannot adequately assess the full effects of affordability proposals with insufficient data."

The committee will continue to focus on flood insurance affordability "to prioritize these issues so that proposals can be considered ahead of the 2017 reauthorization of the National Flood Insurance Program," Waters said.

Report proposals

The reports highlighted several ways to target assistance to owners with financial need, such as a means-tested program. However, FEMA does not have a way to collect income information for policyholders who are currently receiving subsidies, nor does it collect data that it would need to calculate the full-risk rate for those properties.

"Without this information, Congress cannot fully estimate the costs of the proposals and FEMA cannot fully implement them," Waters said.

FEMA's latest report is posted online.

© 2016 Florida Realtors®

 

Related Topics: Property insurance