On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law. This bill provides much-needed relief for property owners in flood zones not only in the Delta region but across the country.

Used with Permission from FEMA View in FEMA Multimedia Library

Under the new bill, 1) sales will no longer trigger immediate premium increases, and 2) properties that complied with prior flood map requirements will be grandfathered, which would likely mean that insurers may not require elevation certificates at the sale to obtain flood insurance.

This new legislation is in response to the Biggert-Waters Flood Insurance Reform Act of 2012 which initiated huge increases in premiums for holders of flood insurance and to the increased costs at sale due on properties in flood zones.

The huge rate increases back in 2012 had a devastating effect on the real estate market in the delta. Fortunately, this updated law should ease the crunch it put on local property owners as well as would-be buyers.

Other provisions of the new (Menendez-Grimm) bill are: It limits yearly premium increases to 15% for nine FEMA property categories, no individual policy increases of more than 18% for most properties built after 1975 and 25% for older properties.

It provides refunds of premiums to homebuyers after Biggert-Waters effective date. It provides for an annual $50 surcharge for residential policyholders and a $250 surcharge for businesses and second homes.

It also strives to reach a goal where most residential policyholders have a premium no greater than 1% of the value of coverage (i.e. $2,000 for a $200,000 policy). And it establishes a Flood Insurance Advocate within FEMA to, among other things, answer current and prospective policyholder questions about the mapping process and flood insurance rates.