Attorney General Martha Coakley and House Speaker Robert DeLeo have filed legislation that would limit the flood insurance that mortgage lenders can require homeowners.
The legislation comes after FEMA updated and expanded flood zone maps, which could mean higher flood insurance costs for homeowners in flood zones. Flood zones impact coastal communities the hardest, but the FEMA flood zone maps expanded in many inland communities too.
The bill would not allow lenders to require 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,” reported Insurance Journal.
Coakley and DeLeo said the legislation would lower premiums by those impacted by the FEMA changes because the coverage would be tied to the outstanding mortgage balance rather than the replacement value of the home, reported Insurance Journal.
Though Coakley and DeLeo said the bill would help homeowners, it would not solve all the issues with the FEMA flood zone maps. Massachusetts’ congressional delegation sent a letter to Capitol Hill leaders asking that FEMA postpone the rules until there is a full review of the maps, reported The Boston Globe.
‘‘We continue to urge the federal government to delay implementing these changes until they've followed all the steps required by law,’’ Attorney General Martha Coakley told The Boston Globe in a statement. ‘‘In the meantime, this state legislation can help mitigate the impact of these costs on families and businesses.’’