Fitzpatrick: Flood insurance rate increase in works since 2012

LEWISTOWN – Changes in flood insurance rates was a main topic of discussion Thursday during a meeting of the Mifflin County Planning Commission.

During the meeting Dan Fitzpatrick, state National Flood Insurance Program Coordinator, gave a presentation talking about the changes that could be affecting 47 percent of Pennsylvania residents.

“Some homeowners have already started to notice an increase in their rates for flood insurance,” Fitzpatrick said. “This was started with the Flood Insurance Reform Act of 2012, but with some new acts should begin to stop.”

Fitzpatrick said part of the problem with the act of 2012 is that the act wanted to quickly raise the rates to accurately reflect the risk of those living in flood plain areas. He also said the Homeowner Flood Insurance Affordability Act 306-91, which was signed into law on March 21, truly balances fiscal solvency with consumer affordability.

“This is still really new,” he said. “Our office has not had a chance to look this over to be able to understand it fully, but we do know it is designed to protect homeowners from unreasonable and unrealstic premium increases, which is what some are seeing now.”

This most recent act provides greater consumer affordability and predictability in five areas. The first thing is does is to permanently remove the home sale or new policy rate increase trigger for primary residences. Fitzpatrick said this treats the person buying the home the same as the person selling it, and restores real estate markets in communities across the country. The second is it reinstates grandfathered rates by decoupling rate increases with the Federal Emergency Management Agency remapping.

“The removal of this provision ensures that policy holders are not penalized who built to code and built to standards of existing flood insurance rate maps,” Fitzpatrick said.

He also said that creating new maps is a priorty of FEMA, but FEMA does not currently have the funding to create these new maps.

Another way this new act helps is to provide a refund for the people who purchased a subsidized home without the full transparency from FEMA. Fitzpatrick said it also provides home improvement protection by increasing the threshold that triggers a loss of grandfathered status. The proposal would raise it from 50 percent from the existing 30 percent. Fitzpatrick concluded that this new act also includes other affordabilty measures which include high deductible options, and more.

He also said all of this could change again as the Affordabilty Act is only delaying the Reform Act of 2012. Fiztpatrick said the changes could come after an affordabilty study is done as part of the Reform Act of 2012.