Gov. Nikki Haley is asking federal lawmakers to allow subsidized flood insurance rates to be applied to sold homes, an effort to help stabilize South Carolina’s home sales market.
Haley made the request in a recent letter addressed to members of the state’s congressionoal delegation.
“We have heard accounts of real estate transactions falling through and property owners losing their homes because the new rates are unaffordable — this is counter to the spirit of the (National Flood Insurance Program),” she wrote. “If the goal of reform is to gradually move the market to a risk-based model, then I ask that you spur congressional action to apply the rate phase-in to all property owners.”
The higher rates are the result of the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012, a law intended to reform the debt-laden National Flood Insurance Program.
Pieces of the law have been phased in since the start of the year. It’s expected to trigger 10 percent increases on average when policies are renewed. It also will gradually remove subsidies, requiring homeowners to assume the full risk rate over five years.
On Oct. 1, a new policy mandated that homes built before the first federal flood map, so-called pre-firm structures, will no longer qualify for subsidies once they are sold.
Some local Realtors have said the law threatens to nix a sale once the buyer quotes the new, higher flood insurance rate.
Earlier this month, a Charleston County legislative committee recommended all state legislators in the region draft a letter urging federal lawmakers to push for further review of the impacts of the rate changes.
Reach Tyrone Richardson at 843-937-5550 and follow him on Twitter @tyrichardsonPC.