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March 17, 2014

Lawmakers scrambling to provide relief for flood insurance

(Continued)

Amid the public outcry, federal and state lawmakers have responded with rare bipartisan unity.

On Thursday, the U.S. Senate voted 72 to 22 to repeal a provision in the 2012 law that eliminated subsidies for hundreds of thousands of properties that were originally built to code but later found to be at greater flood risk.

“Grandfathered” homeowners benefit from below-market insurance rates subsidized by other policyholders. The new legislation preserves their subsidies and caps premium increases at 18 percent a year. Another provision allows sellers to pass subsidized policies onto those buying their homes.

The House passed the measure last week by a vote of 306 to 91, with support from U.S. Rep. John Tierney (D-Salem) and other Bay State congressmen who had voted for the 2012 law. President Barack Obama is expected to sign it.

“This actually makes some major changes to the 2012 law, instead of just delaying it,” Ruffini said. “It will provide some immediate relief for people.”

Earlier in the week, the Massachusetts House unanimously approved a bill designed to lower premiums by tying the required level of flood insurance to a homeowner’s outstanding mortgage balance, rather than full replacement value. The measure also would prohibit mortgage lenders from requiring coverage for the contents of a home or including a deductible of less than $5,000.

The legislation could be taken up by the Senate as soon as next week.

State lawmakers said despite local efforts to provide relief for homeowners, the issue should be resolved in the Beltway, not on Beacon Hill.

“We’re doing what we can within the scope of our authority, but ultimately, this is a problem that needs to be addressed at a federal level,” said state Sen. Bruce Tarr of Gloucester, the Republican minority leader. “I think what we’re doing locally will provide some relief, but it’s really more intended to help people stay in their homes than it is to help folks sell their homes.”

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