Greetings Everyone, 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 Unless this bill is dramatically changed or rescinded, our flood insurance rates will rise dramatically.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, Brad Barcom Rocky Ripple Town Council President From Zach: 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 insurance. 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 Solution 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 Call: 202-225-4011 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 Call: 202-224-5623 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 Call: 202-224-4814 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 are revised. 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. Sincerely, Denizen of Rocky Ripple
