Mass. bill seeks to soften flood insurance rules
BOSTON — Legislation backed by Attorney General Martha Coakley and state House Speaker Robert DeLeo aims to soften the impact of new federal flood insurance rules on some homeowners.
The bill, unveiled Wednesday, would tie the level of flood insurance that must be purchased to a homeowner’s outstanding mortgage balance rather than the full replacement value of the home. The measure would also prohibit mortgage lenders from requiring coverage for the contents of a home or including a deductible of less than $5,000.
The legislation would provide homeowners who have been hit hard by the federal changes with an option of purchasing cheaper flood insurance, though the reduced premiums would also leave them with the prospect of less coverage should serious flooding occur. State officials said enormous increases in flood insurance premiums resulting from the new rules that took effect Oct. 1 are having a devastating effect on residents, particularly those on the coast.
“People aren’t going to be able to pay their insurance, and as a result of that, they are going to lose their homes,” DeLeo told reporters following a House Democratic caucus on Wednesday.