Island business and home owners can breathe a little easier today knowing that a bipartisan group of Congressional lawmakers in Washington, D.C., have reached an agreement to delay significant rate increases in the nation's flood insurance program for four years.
The legislation was expected to be filed in the U.S. Senate on Oct. 29 led by a group of lawmakers representing mostly states on the Gulf Coast, including Florida Senator Bill Nelson.
"One way to characterize this is it is one step in a long journey," said Sanibel Planning Commissioner and island insurance businessman Chris Heidrick. "The word deal is not the best way to describe this because it implies that we are done. There is a long way between introducing a bill to it becoming law. It has to go to committee and procedures can get in the way."
The agreement would delay the rat hikes for four years and require FEMA to complete an affordability study before increasing flood insurance premiums in the future.
"This is great news for many Floridians who've been told their flood insurance rates were going way up," Nelson said in a prepared statement. "If people can't afford the coverage, what good is it going to do?"
Congress passed the Biggert-Waters Flood Insurance ReformAct on July 6, 2012, in an effort to make the nation's flood insurance program more financially sound. The program had been hemoraging money since Hurricane Katrina hit New Orleans in 2005.
Biggert-Waters also eliminated certain subsidies that were being given on many homeowners' policies. Those subsidies expired on Oct. 1 leading to residents receiving letters showing their rates increasing from thousands of dollars to tens of thousands of dollars.
"I read the language of the bill draft this morning," said Heidrick. "It would provide some relief for people who purchased property since July 6, 2012, and could issue refunds to some, not all. There would be no relief for a non-primary home or business owner who purchased their policy before July 6, 2012."
Heidrick cautioned that this is not a done deal. There are less than 20 days left in the current Congressional session, so there is a risk that the bill to delay would not pass before January when Congress also will be focusing on the budget and debt ceiling once again.
"I received dozens of calls and emails yesterday," Heidrick said. "My advise to anyone guiding consumers is to be cautious. Proceed according to the law as it stands today - Biggert-Waters in effect - instead of going by what Congress may or may nit do down the road."
Attempts by Nelson and others to address the issue were temporarily slowed during the recent 16-day government shutdown. Because lawmakers on both sides of the political aisle and both legislative chambers have agreed, it's anticipated their legislation could pass quickly. The lawmakers already have asked legislative leaders to find a way to bring the bill up for a vote.