BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley urged Congress on Wednesday to delay the implementation of a new bill that could significantly increase flood insurance rates for families and businesses.
In a letter to House Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.), Coakley asserted that the Federal Emergency Management Agency failed to comply with mandates to conduct affordability and peer reviews. Coakley asked to delay the Biggert-Waters Flood Insurance Reform Act until FEMA conducts a review of the new flood zone maps.
By eliminating some federal subsidies in the National Flood Insurance Program and expanding flood zone maps, the new law could result in harsh economic consequences for homeowners and small businesses.
"Premature implementation of the act threatens the housing recovery that Massachusetts and the nation are just starting to experience," Coakley said. "We believe that dramatically increased flood insurance rates will tip the balance for many homeowners who weathered the economic downturn, but are still feeling the residual effects of the housing crisis."
Coakley asserted that because of the redrawn maps, insurance rates will increase for entities in the flood plain and for homeowners and small businesses that will need to buy flood insurance for the first time.
"We have already heard from many small businesses and homeowners about the devastating impact of this new policy," Coakley said. "Several homeowners that purchased their homes in the last year-as the housing market was turning around-have been informed that the flood maps have been redrawn so that they are now required to purchase flood insurance at costs of $10,000 and up. For many, this additional cost is not feasible."