Please wait as we prepare your PDF file ....

Mission Chronicle Blog

Search Blog

our goal is to help you stay informed by providing timely and interesting articles.

Flood insurance issues muddy the waters of Houston disaster

08/30/2017

Download PDF

Harvey’s timing couldn’t be more interesting from a legislative standpoint.

The storm that’s dumped trillions of gallons of water on Houston has coincided almost perfectly with two flood-related legislative tangles, one national and one statewide in scope:

A bill to reauthorize the National Flood Insurance Program (NFIP), the 21st Century Flood Reform Act, was referred to the House Committee on Financial Services in March; it was approved by the committee in June and hasn’t seen any action since then In Texas, a bill that reduces penalties for insurance companies that don’t adequately compensate claimants passed in May

Here’s what each could mean for homeowners in Houston.

What’s the NFIP, and why could it expire?

Earlier this year, the National Association of Realtors (NAR) made the NFIP a legislative priority for 2017; NAR focused on the NFIP during this year’s Legislative & Trade Expo.

Why? The NFIP has been around since 1968 and was created to “reduce the impact of flooding on private and public structures,” according to the program’s official government website.

“It does so by providing affordable insurance to property owners and by encouraging communities to adopt and enforce floodplain management regulations,” the website adds.

Hone your systems to maximize your real estate lead ROI Develop a smart system and apply it consistently to get results READ MORE

Most homes insured under the NFIP are in Florida and Texas. Owners of properties in participating NFIP communities get access to insurance — the city and county of Houston in Texas are both participating NFIP communities.

The act has been amended, reformed and extended several times since 1968, most recently by President Barack Obama in the Biggert-Waters Flood Insurance Reform Act of 2012, which extended the NFIP through September 30, 2017. (That’s about a month from now!)

So if it is allowed to expire, that could mean that some new and existing homeowners in Houston will have significant trouble securing flood insurance for their homes — and that, in turn, might affect their mortgage loans if their loan is federally regulated or insured (for example, an FHA loan) and the home is located in a “special hazard flood area.”

The 21st Century Flood Reform Act reauthorizes the bill and also provides guidelines for creating better flood maps for the program — but it hasn’t been signed into law yet. And according to some experts, the claims from Harvey could “overwhelm” the NFIP, so Congress might need to authorize more funds or do more work on the act.

What’s with the ‘insurance abuse’ bill?

Earlier this year, Texas passed HB 1774, a tort reform bill designed to target insurance abuse surrounding hailstorms. Texas Governor Greg Abbott said that “hailstorm litigation is the newest form of lawsuit abuse” in his State of the State speech, referring to “frivolous” weather-related claims.

A Texas Department of Insurance report from this year showed a 1,400-percent increase in the number of hail- and windstorm-related claims between 2012 and 2015. Here are the Houston-specific numbers:

To combat that jump in lawsuits, the state legislature passed the bill — which applies not only to hail and windstorm claims, but also to earthquakes, wildfires, tornadoes, lightning, wind, snowstorms — and rainstorms, hurricanes and flooding.

The new rules dictate that any insurance policyholders who file lawsuits against insurance companies for either repaying claims too slowly or failing to pay enough must offer more detail in the notice of intent to file a lawsuit. And if the court eventually rules for the policyholder and against the insurance company, the insurance company will still have to pay penalty interest — but that interest amount will drop from 18 percent to 10 percent.

And they go into effect this year for any claims filed after Sept. 1, 2017. So despite everything else that’s happening in Houston, homeowners should do their absolute best to get those claims filed before Friday.

Email Amber Taufen

Like me on Facebook! | Follow me on Twitter!

Source: click here

Read More

INSPIRED, INTELLIGENT, INSIGHTFULL

STAY INFORMED WITH TIMELY AND INTERESTING ARTICLES FROM OUR BLOG, MISSION CHRONICLE. OUR ASPIRATION IS TO PROVIDE REALTORS AND OTHER REAL ESTATE INDUSTRY PROFESSIONALS WITH EXCEPTIONAL RESOURCES AND SHARE OUR KNOWLEDGE TO PROPEL YOU TO YOUR GOALS.

  • Phixer Mobile brings professional editing to DIY photography

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Becoming an effective real estate mentor

    Experienced luxury agents make amazing mentors since they’ve spent decades delighting clients and ...

  • Need print and social media marketing fast? Enter CoVault

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • What ‘being the best’ means to 5 agents

    Luxury homes and affluent clients require service that is second to none. If you’ve asked yourself...

  • NestEgg cracks the code for small landlords and the agents who help them

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • How 3 agents have leveraged a referral network to sell homes

    Marketing by word-of-mouth is seen as a nice-to-have in most industries. But in luxury real estate, ...

  • LeadJolt plugs into the power of Facebook lead gen

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Finding the perfect home for an unconventional client

    Have you ever had a client request the highest, most panoramic property in the area so they can maxi...

  • Showing app Entro has potential — but should address agent safety

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Dreaming of your brokerage being on the big screen? Try ITESMEDIA

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

January 2021
Mon Tue Wed Thu Fri Sat Sun
 123
45678910
11121314151617
18192021222324
25262728293031

  • Polls

    What information you are looking for?

    View Results

    Loading ... Loading ...
  • Last month Results

    How Is My Site?

    • Good (100%, 3 Votes)
    • Excellent (0%, 0 Votes)
    • Bad (0%, 0 Votes)
    • Can Be Improved (0%, 0 Votes)
    • No Comments (0%, 0 Votes)

    Total Voters: 3

    Vote

    Loading ... Loading ...