PASSAGE OF NATIONAL FLOOD INSURANCE LEGISLATION CRITICAL TO HOMEOWNERS

WASHINGTON (June 27, 2006) –The Flood Modernization and Reform Act (H.R. 4973) passed by the House of Representatives yesterday will strengthen the protection of property owners against flood related disasters and provide flood insurance to millions of homeowners across the country, the National Association of Realtors® said today.

“Floods can strike any place and at any time, and in the wake of the most destructive hurricane season in nearly a century and the recent heavy rains experienced over much of the Midwest and the East Coast, this legislation is critical. NAR strongly supports the provisions in the bill that emphasize the importance of accurate and current flood maps and increase the NFIP (National Flood Insurance Program) borrowing authority to pay existing claims. Meeting contractually obligated payments to policyholders is paramount,” said Thomas M. Stevens of Vienna, Va., president of NAR.

NAR has backed the provisions for increasing premiums on repetitive loss properties that have a significant impact on NFIP, increasing coverage limits, reducing the waiting period for policies to become effective, creating a national levee inventory, and requiring FEMA to report to Congress on the financial status of the NFIP. “These provisions will strengthen the NFIP over the long-term,” said Stevens.

In an earlier letter to the House Financial Committee, Stevens said that non-primary residences should be given the same consideration as primary residences and should not be charged full risk premiums unless they are a repetitive loss property. NAR continues to have reservations over the provision in H.R. 4973 that would eliminate subsidies on non-primary residences and business properties.

“NAR also is concerned with Rep. Scott Garrett’s (R- N.J.) amendment, which was adopted in Tuesday’s hearing. We believe the result will be that owners of neighboring primary residences, with identical risk of flooding, will be paying different rates for flood insurance. This presents a truly unfair and possibly discriminatory situation,” said Stevens.

“Overall, we are very pleased with the actions taken today by the House and believe this legislation will help protect homeowners,” says Stevens.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Article offered by the NAR