House passes new federal flood insurance policy
CHARLESTON, S.C. (WCIV) --- The U.S. House voted late Tuesday to propose a new federal flood insurance bill. The legislation would eliminate a point of sale provision and spread rate increases over time.
The Biggert-Waters Act was instituted in 2012.
"We've had some major storms in this country that, some major flooding in the mid-west to west, some hurricanes in Louisiana and New Jersey," said Ryan Castle, government affairs director for the Charleston Trident Association of Realtors. "The flood insurance program has basically been in debt. So, it's trying to create some places where you can start trying to pay that debt."
Since 2012, homeowners across the country have seen their National Flood Insurance bills increase. In certain cases, payers saw their bills quadruple.
"There are several folds in this problem" said Scott Nigels, a 28-year old homeowner in West Ashley. "One is we may not be able to afford it. And, since the house is paid for we'll be considering just dropping flood insurance."
Nigels says he and his wife also fear how the bill in its current state could impact their resale value.
"We're concerned about in some point in time, if we ever decide to resell the house or sell it, how would that affect a potential buyer," he said.
Castle says Charleston realtors have seen potential buyers back out of contracts due to the fear of premium increases.
"If this bill passes, it removes the point of sale provision," Castle said. "So, it puts the certainty back into the real estate market as far as flood insurance, to get the real estate to stop having flood insurance drag it down."
Tuesday afternoon, Congressman Mark Sanford said the House bill was the best option for the homeowner.
"With any transition, even on something on Social Security, Medicare, Medicaid give people time to react so that if they have been basing their life or planning their life on a government promise, they have time to make a change," said Sanford.
Sanford says the House bill would allow the premium increase to be spread out over time per year, instead of implementing the costs at once.
"This bill is about putting a pause on a bill that had some unintended consequences that people weren't planning on," said Sanford.
The House bill will now be combined with a Senate bill to create a single legislation. The law would then have to be signed by President Barack Obama.