“The bill by Attorney General Coakley is good as a short term measure but we need to get involved with federal officials because, as property owners are becoming aware of this, it is evolving into a very serious real-estate issue.”
Coakley, in a press release, said that tying the amount of coverage to the outstanding mortgage balance, instead of the replacement value of the house, would lower premiums for the homeowners impacted by the new change.
“These new flood insurance changes are going to devastate many families and businesses in our coastal communities,” said Coakley, who visited Newburyport recently as part of her announcement that she is running for governor in 2014.
“We continue to urge the federal government to delay implementation of these changes . . . but in the meantime, this state legislation can help mitigate the impact of these costs on families and businesses,” she added.
The federal legislation that is fostering new insurance rates is the Biggert-Waters Flood Insurance Reform Act of 2012. The regulations are now law, and Oct. 1 was seen as a trigger date for the new measure to be implemented.
Legal authorities say the law was passed because federal authorities can no longer afford to subsidize flood insurance due to the increasing amount they are paying out for natural disasters, including damage from the recent Superstorm Sandy.
State and local officials gathered in Lynn several weeks ago under the auspices of the office of U.S. Rep. John Tierney, D-Salem, to discuss their concerns about rising insurance costs.
Several city councilors from Lynn said that much of that community lies within the new flood plain, and that “people with modest incomes are going to have trouble hanging on to their houses due to higher rates from this legislation.”
Costello and Tarr said the same could be true of Plum Island.