Flood insurance sanity: Grimm brokers deal to hold the line on premiums
Staten Island Advance Editorial on March 10, 2014
Thousands of Staten Islanders faced a devastating one-two punch when Hurricane Sandy struck not long after exorbitant rate hikes were approved for U.S. flood insurance policies.
Many Island homeowners were already paying annual premiums of $2,500 or more for flood coverage even before those looming increases hit, bringing their premiums to perhaps $10,000 or higher.
So Rep. Michael Grimm of Staten Island deserves appreciation for winning House approval of his bill to ward off those new expenses following the 2012 hurricane.
The Senate already had passed similar legislation to ease financial worries related to the threat of flooding.
Nowhere does this help in the insurance crisis come as a greater relief than on Staten Island. Jacking up flood premiums would needlessly have added a manmade blow to Mother Nature’s wrath.
As Alex Tacoronte of Dorp Beach said, “We’d be stuck with these homes that nobody is going to want to buy. Who is going to want to buy a house that is going to have an extra $1,000 a month just for flood insurance?”
Under reforms designed to reduce costly federal subsidies, the rate hikes due for flood insurance were particularly high in older coastal communities, such as those on Staten Island and elsewhere in New York City.
This put a damper on home sales in flooded neighborhoods amid fears of future uncovered damage.
The House bill imposes a lower cap on insurance premiums and repeals a provision to impose sharp increases on buyers of homes in flood-prone areas. It also preserves below-market insurance rates for people whose homes meet federal flood map standards.
“It’s a blessing that they put a cap on it,” New Dorp Beach homeowner Domenick Camerada said. “That’s going to keep the people down here, and give them some sense of hope that they’re not going to get pushed out of their house, because without having a cap on the flood insurance, it forces you to just walk away.”
The Senate, which is now expected to go along for the most part with the House legislation, had voted to delay the flood insurance overhaul for four years.
The nationwide federal subsidy program is currently about $24 billion in the red, mostly because of huge losses from Hurricane Katrina and Hurricanes Sandy.
The insurance reforms that had been initiated by Congress were an effort to wean hundreds of thousands of homeowners off the heavily subsidized federal rates.
But Rep. Maxine Waters, who co-sponsored the 2012 bill as well as the latest fix, said that dramatic premium hikes were neither anticipated nor intended.
Ms. Waters (D-Calif.) hailed Mr. Grimm (R-Staten Island/Brooklyn) for working to bring about bipartisan support in an election year for the new legislation.
For his part, Mr. Grimm said he was proud to contribute to a “rare moment of harmony in a Congress increasingly defined by bitterness and resentment.”
There is much agreement on Capitol Hill with President Obama’s belief that a phased transition to risk-based flood insurance rates is to be sought.
But doing this so abruptly while victims of Hurricane Sandy are still reeling would have been too much to bear. Especially on storm-ravaged Staten Island.
Flood insurance cap ‘a blessing’ — may help some Staten Islanders stay in their homes
By Michael Sedon/Staten Island Advance
STATEN ISLAND — New Dorp Beach homeowner Domenick Camerada called the cap on flood insurance premiums a “blessing” that will help Staten Islanders like him stay in their homes after sinking thousands of dollars into repairs after Hurricane Sandy.
Although Camerada received help from many volunteer organizations with his continuing repairs, he still used about $60,000 of his “hard-earned money” to get started, he said.
“It came to the point where I was paying $5,700 for flood insurance,” Camerada said. “It’s a blessing that they put a cap on it. That’s going to keep the people down here, and give them some sense of hope that they’re not going to get pushed out of their house because without having a cap on the flood insurance it forces you to just walk away.”
After paying flood insurance for 18 years, his premium rose to equal about the same in tuition that it costs to send his son to Monsignor Farrell High School for a year. So a couple years before Sandy hit, Camerada paid off his mortgage so he could drop the expensive flood insurance.
“I took the gamble, pretty much like everybody else did that couldn’t afford the flood insurance rates, and I wound up paying the price,” Camerada said. “But even after hearing the people that did have flood insurance, I think I made the right decision because they try to fight the insurance companies to get the money to rebuild, and they’re in the same process that I am. They didn’t get help.”
On Tuesday, Congress passed Rep. Michael Grimm’s Homeowner Flood Insurance Affordability Act, which derails potentially huge increases in flood insurance premiums for those in flood-prone areas, including Staten Islanders still recovering from Sandy.
The bipartisan bill garnered 180 Democratic votes, and 126 Republican. Another 86 Republicans voted no, while five Democrats did so.
“It’s hard to find the words to express how incredibly proud I am to have sponsored this tremendous victory for my constituents as well as one of Congress’ most consequential bipartisan achievement in recent years,” Grimm said.
It now goes to the Senate, which had previously passed its own flood insurance bill.
That bill included gradual elimination of subsidies, aimed at putting the National Flood Insurance Program (NFIP), which has been in the red for years, on sounder financial footing.
But that led to increased premiums and “sticker shock” among homeowners. Some saw increases of as much as 500 and 600 percent. The Grimm bill caps any yearly increases at 18 percent.
Going forward, Camerada said knowing his flood insurance will remain relatively stable will help him to stay in his neighborhood, which he loves.
“We have a little relief knowing that we’re going to be paying that amount and it’s not going to go through the roof,” he added. “If the flood insurance goes up to $10,000 a year, it’s like a mortgage payment.”
Some residents are still considering moving anyway.
Many “for sale” signs could be seen in Alex Tacoronte’s New Dorp Beach neighborhood, and he said the cap will help those people sell knowing that the premium will not go up to $13,000 as he previously heard.
“Being able to sell these houses too is a big help,” Tacoronte said. “We put basically our savings into repairing the house. The insurance still hasn’t paid out.”
He said higher premiums would “devastate” his neighborhood.
“We’d be stuck with these homes that nobody is going to want to buy,” he said. “Who is going to want to buy a house that is going to have an extra $1,000 a month just for flood insurance.”
Alex Penack saw a small increase to his premium, but felt his Midland Beach neighborhood would not see massive hikes.
“There’s rumors that (flood insurance) is going to go up to $10,000 within five years, and then the neighborhood would be unaffordable,” Penack said. “But I’m not sure if this particular area would go up that high. I don’t think it warrants it.”
Penack is considering whether to sell, and insurance costs may still play into that decision.
“Eighteen percent is steep,” Penack said. “Anybody with a mortgage, it would make it unaffordable. Somebody would really have to want to live near the water to do that.”
House Approves Bill That Prevents Steep Flood Insurance Rate Hikes
It took some time, but House leaders were finally able to pass legislation that would put the brakes on rising flood insurance rates.
The legislation is in response to a 2012 law that aims to shore up the debt-saddled flood insurance program by putting premiums in line with risk.
Some lawmakers say that that law has made insurance in flood zones, including those impacted by Hurricane Sandy, unaffordable to many homeowners.
Staten Island Rep. Michael Grimm hails bipartisan passage of flood insurance bill
WASHINGTON, D.C. – Rep. Michael Grimm on Tuesday called the passage of his bill to repeal increases in flood insurance premiums “a major uplifting milestone in our city’s long road to recovery since Superstorm Sandy.”
The House on Tuesday passed Grimm’s Homeowner Flood Insurance Affordability Act by a vote of 306-91.
2 Years Later, Congress Poised To Undo Flood Law
WASHINGTON (AP) — Less than two years after Congress approved a landmark bill to overhaul the federal flood insurance program, lawmakers are poised to undo many of the changes after homeowners in flood-prone areas complained about sharp increases in premiums.
The House overwhelmingly passed a bill Tuesday night that would allow sellers to give their subsidized, below-market insurance rates to new buyers and lower the cap on how much flood insurance premiums can rise each year.
House passes flood-insurance bill from Staten Island Rep. Michael Grimm
By Tom Wrobleski/Staten Island Advance, read the original piece here.
WASHINGTON, D.C. – The U.S. House of Representatives on Tuesday night passed a bill from Rep. Michael Grimm (R-Staten Island/Brooklyn) that repeals steep increases in flood-insurance premiums.
The bi-partisan roll call vote was 306-91.
“It’s almost surreal standing here right now,” Grimm said during the House debate on the bill prior to the vote. Continue Reading
Congressman Grimm Receives New York State Independence Party Endorsement
NEW YORK CITY, NY -
TODAY, Frank MacKay, Chairman of the New York State Independence Party announced the organization’s full endorsement of Congressman Michael G. Grimm for re-election in New York’s 11th congressional district:
“Congressman Grimm has proven himself to be a truly independent voice for his constituents in Staten Island and Brooklyn.” said Chairman MacKay. “In an era of partisan gridlock and political gamesmanship plaguing Congress, Rep. Grimm stands out among the rest as someone who has worked across party lines to get things done, and his conscientious voting record demonstrates this much-needed pragmatism.” Chairman MacKay continued. “Michael Grimm is not afraid to stand up to his own party and put people above politics when their best interest is at stake, and for that continued courage and independence, we fully support him for re-election.”
Amid de Blasio Inattention, Sandy Build It Back Construction Set to Start
Despite Mayor Bill de Blasio’s lack of attention to the city’s Sandy housing recovery, a very positive sign of progress is on the horizon.
The city’s main housing recovery program, Build It Back, will start rebuilding homes this month.
On Monday, a Build It Back official who did not wish to be named confirmed the information. The official said that construction on almost two dozen houses is scheduled to start in March. The only foreseeable delay would be inclement weather. Continue Reading
Staten Island GOP Rep. Michael Grimm: Flood-insurance bill stronger after changes made
WASHINGTON, D.C. — Rep. Michael Grimm (R-Staten Island/Brooklyn) on Thursday said that an improved flood-insurance bill will receive “broad, bi-partisan support” when voted on by the House next week.
The bill was set to be voted on Thursday, but that time frame was pushed back after tweaks were made to the bill during the week. Grimm’s office said a vote could come on Tuesday.
Rep. Grimm’s flood-insurance reform bill up for House vote this week
By: Virginia N. Sherry on February 23, 2014
STATEN ISLAND, N.Y. — The prospect of massive increases in flood-insurance premiums for Staten Island and Brooklyn homeowners will be forestalled if the U.S. House of Representatives approves reform legislation, Rep. Michael Grimm (R,C-NY) said Saturday.
“Today, the beacon of hope burns that much brighter for the countless Americans facing crippling uncertainly and financial ruin from skyrocketing flood-insurance premiums,” he said in a statement announcing that the draft version of his flood insurance reform package, H.R. 3370, the Homeowner Flood Insurance Affordability Act, had been posted for public notice.