Flood Insurance Legislation Removes Penalties for Homeowners
On April 28, 2016, the “Flood Insurance Market Parity and Modernization Act”, NFIP, H.R. 2901, passed the U.S. House of Representatives with assistance by Florida Congressmen, Dennis Ross and Patrick Murphy. Realtors® all over the country are strongly in support of the law and believe it is crucial for protecting homeowners and allowing real estate transactions to proceed with no interruption.
Early in 2016, the National Association of Realtors (NAR) urged the House Financial Services Committee to support the bill, and it later passed with a unanimous vote, allowing it to be brought to the House floor. The president of the NAR, Tom Salomone, was thrilled with the passage of the bill, calling it “a step forward for reform of the broader flood insurance system.”
Up until this bill passed, homeowners were experiencing difficulties in switching between private insurance to the National Flood Insurance Program (NFIP). Although homeowners have the right to purchase flood insurance through a private company, if they chose to switch to the NFIP in the future, they could end up paying higher rates. Conversely, if a customer chose to switch to private insurance from the NFIP, the NFIP would view it as a temporary lapse in coverage and could penalize the customer. H.R. 2901 would eliminate the said “lapse” and allow customers to interchange between the 2 forms of insurance with no consequences. Private insurance companies and homeowners alike should benefit from this new legislation.