Bipartisan legislation that would delay flood insurance premium hikes for hundreds of thousands of people living in coastal and low-lying areas appears set to clear its first hurdle in the Senate on Monday.
The legislation would delay for up to four years premium increases set to phase in next year on homeowners facing whopping premium increases under new flood maps and would allow homeowners with subsidized insurance policies to pass them on to people who buy their homes.
The higher premiums are the result of changes made to the federal flood insurance program less than two years ago— widely praised as long-overdue reforms of the program—that were designed to make it more financially stable and bring insurance rates more in line with the real risk of flooding.
(Read more: Flood insurance costs rising)
But the new rates have caused sticker shock for hundreds of thousands of people who could face big premium jumps as flood maps are updated in coming years. And the loss of subsidies when homes are sold has put a damper on the real estate market and threatened home values. Homeowners are seeing estimates that in many cases would force premium hikes of ten times or more as their homes are judged to be at greater risk of flooding.
"It's had a significant impact in the flood-prone areas," said Ken Baris, a real estate agent in West Orange, New Jersey. "There's lots of people who are seeing their equity being eaten up."