For Immediate Release - March 12, 2014

AG Coakley Applauds Passage of Flood Insurance Legislation by House of Representatives

Proposed Bill Would Cap Increasing Flood Insurance Rates

BOSTON – After the Massachusetts House of Representatives unanimously passed legislation filed by Attorney General Martha Coakley and House Speaker Robert DeLeo to prevent dramatic increases in flood insurance rates, AG Coakley issued this statement:

“This bill will offer relief to homeowners who just survived the economic downturn and are still feeling the residual effects of the housing crisis,” AG Coakley said. “I want to thank Speaker DeLeo for filing this legislation and Representatives Michael Costello, Jim Cantwell and Garrett Bradley for continuing to shine a light on the Federal Emergency Management Agency’s management of the flood insurance program. We urge the Senate to approve this legislation. Without help, homeowners throughout the Commonwealth will be at risk of losing their homes and we must not let that happen.”


AG Coakley testified with Speaker DeLeo on the legislation, An Act Relative to Flood Insurance before the Joint Committee on Financial Services on February 27. The legislation was filed by AG Coakley and Speaker DeLeo, and co-sponsored by Representatives Cantwell, Bradley, Josh Cutler, Bruce Ayers, Tim Madden, David Vieira, Vinny deMacedo, Senator Robert Hedlund, and Congresswoman Katherine Clark, who previously served as a state senator.

The bill would prohibit creditors from requiring homeowners to purchase flood insurance in an amount that exceeds the outstanding balance of their mortgage, requires coverage for contents, or includes a deductible of less than $5,000. Tying the amount of coverage to the outstanding mortgage balance, instead of a higher amount, would lower premiums for the homeowners impacted by the new change. Homeowners would still have the option of purchasing a greater amount of insurance.            

The legislation requires, in each instance flood insurance is required, a notice to be provided to homeowners explaining that insurance coverage tied to the outstanding mortgage amount will only protect the current mortgage interest, and may not be sufficient to pay for repairs or property loss after a flood.

In September 2013, AG Coakley called on Congress and FEMA to reform new flood insurance laws at the “Make Waves” rally in Scituate alongside Congressman Stephen Lynch, Representatives Cantwell, Bradley and Senator Hedlund as well as other local elected officials.

In October 2013, AG Coakley sent a letter to House Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nevada) urging the delay of the Biggert-Waters Flood Insurance Reform Act until FEMA complies with Congress’ mandate to undertake an affordability review and a peer review of the new flood zone maps defined in the bill.

AG Coakley filed an amicus brief in November supporting a Mississippi lawsuit alleging the new flood rates are arbitrary and unlawful. The brief argues that FEMA failed to collect accurate data before implementing the new rates.

In January, the U.S. Senate approved bi-partisan legislation that postpones rate increases until FEMA assessed the impact of an overhaul to the flood insurance program. Earlier this month, Republicans in the U.S. House presented their own version of a flood insurance overhaul.

On February 5, FEMA announced that it would not be implementing higher flood insurance premiums until at least October 2015. FEMA has also announced that it will postpone implementation of new flood maps in Plymouth County until at least 2015, to give the agency more time to address the appeals from affected communities.


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