Senate delays flood insurance rate increases

Flooded carThe Senate today passed a bill that would delay steep premium increases for federal flood insurance, promising relief to the hundreds of thousands of East Coast homeowners hard hit by Superstorm Sandy in 2012.

Sen. Tim Kaine (D-Va.) said the bill “makes a sensible change to protect coastal residents in Virginia and around the country from being priced out of their homes.”

“Due to climate impacts like sea-level rise and more frequent storms, insurance rates must begin to reflect the fact that flood risk is higher now than in the past.  But before any rate increases, we should examine the financial impact on fixed-income homeowners,” Kaine said. ” I heard from many constituents, particularly seniors in Hampton Roads, with deep concerns about how they would afford major premium increases.”

But in the GOP-controlled House, Republican leaders are supporting a more modest plan. If no compromise can be worked out, the originally-scheduled premium hikes will go into effect.

The Senate bill delays insurance premium increases for four years. The increases are currently set to hit homeowners in federally designated flood zones next year. Critics say that many property owners are now paying rates that do not accurately reflect the risk of floods.

The National Flood Insurance Program faces multi-billion dollar deficits, and both environmentalists and fiscal conservatives argue that taxpayers should not be on the hook for those who choose to live in high-risk areas.