The Massachusetts state Senate on June 26 passed legislation filed by the state’s attorney general, Martha Coakley, and state House Speaker Robert DeLeo aimed at softening the impact of flood insurance rate increases.
The bill, H 3783 (“An Act Relative to Flood Insurance”), has already passed the Massachusetts House of Representatives this past March.
“This bill will help protect homeowners living in flood zones from unaffordable insurance premiums. This measure, combined with federal legislation signed into law earlier this year, will help families facing increased flood insurance premiums remain in their homes,” Coakley said. “We want to thank Senate President Therese Murray and the Senate for passing this legislation, and look forward to this bill making it to the Governor’s desk.”
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 required coverage to the outstanding mortgage balance, instead of a higher amount, would keep premiums lower for homeowners affected by the National Flood Insurance Program, Attorney General Coakley’s office said. 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.
Source: Massachusetts Attorney General’s office
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