I wanted to provide you all with an update and an action plan with
regards to the Biggert Waters Flood Insurance Reform Act of 2012.
Unless this bill is dramatically changed or rescinded, our flood
insurance rates will rise dramatically.
Zach Cattell, a member of our community, wrote a very good document
about this act and I'm including it below. In addition to that, I'm
including a sample letter that you can modify to send to your
legislatures listed below. Please take the time to act on this.
If you don't, it may cost you your home. Also, please send these
letters electronically if at all possible, as snail mail is just that
in this day of poisoned letters. A physical letter going to Capitol
Hill can take over a month to get through.
Thanks for you time,
Rocky Ripple Town Council President
Hurricane Katrina and Superstorm Sandy put unprecedented stress on
the National Flood Insurance Program (NFIP) over the last several
years, causing billions in damages and losses to the NFIP. The NFIP
is the only source of flood insurance for anyone living in a flood
zone, coastal or inland. Federal subsidies for certain policies,
about 20% of all flood insurance rate payers, have been in effect
for decades. The Biggert Waters Flood Insurance Reform Act of 2012
(BW12) begins to take some of those subsidies away immediately
(businesses and non-primary residences), and for primary residences
upon resale of the property, upon lapse of policy, or when the Flood
Insurance Rate Maps are revised. Under federal law, those with
federally backed mortgages in flood zones are required to buy flood
As of October 1, 2013, BW12 institutes a rating system for flood
insurance that utilizes a property’s relationship to Base Flood
Elevation (BFE) for purposes of determining risk of loss and flood
insurance premium. BFE is the 1% chance of exceedance – or said
another way, the chance that a flood will hit that level is 1%.
This is also the same thing as a “100-year flood.” Some properties
under this new system will see decreases in rates because the
property’s lowest rated level is higher than BFE even though they
are in a flood zone. However if a property’s lowest rated level
is at or below BFE, the premium will rise substantially.
For those that live below BFE, BW12 has a significant negative
impact on single family primary residences, which are most
working-family’s largest asset. BW12 immediately devalues the
home itself due to the cost of flood insurance to a prospective buyer.
•For example, a home that is 4 feet below BFE in a river flood zone
(zone AE) pays about $1,750 per year for $250k of structural
coverage (the maximum amount of coverage you can buy). Under the
BW12, the cost of that insurance is estimated to be more than
$10,000 per year
•During the week of October 14th, 2013, a $112,000 property in
Indianapolis, IN had an accepted offer of purchase, however the
buyer backed out when they were told their flood insurance premium
would cost $7,000 per year.
Better Solutions Must Be Found and AFFORDABILITY Is Central To Any
Most if not all of the attention to this matter focuses on coastal
areas where Katrina and Sandy had the most impact and the debate
rages as to how those communities will be rebuilt. However, this
law also impacts inland homes and flood insurance premiums, and is
terrible public policy.
While it may be a desired federal policy for building to stop in
high risk flood areas, or at least building at or below BFE to stop,
it is not equitable to those families currently living in flood
zones to be financially devastated due to risks outside of their
control. In addition, real estate markets will freeze in these
areas and homes may be abandoned. Establishing flood insurance
rates that are unaffordable is no way to provide fiscal stability
to the NFIP.
CONTACT YOUR U.S. REPRESENATIVE and U.S. SENATOR – Tell them to
Support H.R.3370 and S.1610 to delay
Biggert Waters and Require Affordability Studies by FEMA and
Congressional Review of the FEMA Study
Representative Andre Carson
2453 Rayburn House Office Building
Washington D.C., 20515
Flood Insurance Staff: Andrea Martin
Email letters at: http://rockyripple.us5.list-manage.com/track/click?u=ad15075436e621ba94edfd1f1&id=0151fd35f7&e=2e04407e1a
Senator Dan Coats
493 Russell Senate Office Bldg
Washington, DC, 20510
Flood Insurance Staff: Kate Taylor
Email letters at: http://rockyripple.us5.list-manage2.com/track/click?u=ad15075436e621ba94edfd1f1&id=35083c1282&e=2e04407e1a
Senator Joe Donnelly
720 Hart Senate Office Building
Washington, D.C. 20510
Flood Insurance Staff: Nick Cantino
Email letters at: http://rockyripple.us5.list-manage.com/track/click?u=ad15075436e621ba94edfd1f1&id=b72483c196&e=2e04407e1a
SAMPLE LETTER TO CONGRESS:
Feel free to cut, paste and modify so you can make the letter your own.
Dear Representative Carson, Senator Coats and Senator Donnelly,
I urge you to co-sponsor and support passage of H.R.3370 and S.1610,
respectively, to delay the devastating impact that the Biggert
Waters Flood Insurance Reform Act of 2012 is having on my community
and home. Over the past several weeks I have learned that this law
will require unaffordable premiums to be paid for flood insurance
for newly issued policies, or even on my existing policy should I
sell my home, if my policy lapses, or if Flood Insurance Rate Maps
This law is financially devastating to my community and my family.
Our homes are now worth next to nothing since any prospective buyer
of any home that requires flood insurance will not pay the
unaffordable rate. Just last month a home in our neighborhood was
set to sell for $112,000 until the buyer found out the annual flood
insurance premium would be more than $7,000!!! The flood insurance
programs own materials say that a flood insurance policy for a
home that is 4 feet below base flood elevation would be more than
$10,000 per year for the maximum amount of coverage.
It is simply poor policy and extremely short sighted to lay these
unaffordable costs at the feet of individual taxpayers. Ruining
the American dream of home ownership and destroying the value of
most family’s largest asset is not a path toward prosperity or
stability for the flood insurance program.
Biggert Waters must be delayed and more affordable solutions
found to permit the flood insurance program to continue without
ruining the lives and homes of so many.
Denizen of Rocky Ripple