Congress has officially placed the bipartisan Homeowner Flood Insurance Affordability Act in hands of President Obama. If enacted, it will undo significant provisions of a 2012 law that caused sharp flood insurance rate increases.
On March 4, the U.S. House of Representatives voted 306-91 to pass the Homeowner Flood Insurance Affordability Act of 2014, H.R. 3370. This repeals portions of the Biggert-Waters Flood Insurance Reform Act. Just yesterday, March 16, the U.S. Senate voted 72-22 to approve the bill and send it to the President for his consideration.
For those who don’t remember the Biggert-Waters Act, it was passed back in 2012 with overwhelming support in both houses of Congress. It called for changes to the National Flood Insurance Program. The NFIP, as you may know, is currently running an enormous and ultimately unsupportable deficit of $24 billion, so the Biggert-Waters Act aimed to eliminate subsidies for two kinds of homes: those homes built before flood maps existed and those homes “grandfathered” in, which is to say that they were originally built to code only to find that the new FEMA maps placed them in high-risk flood zones. In doing so, Biggert-Waters caused steep rate increases for owners of these types of properties. Homeowners in Florida, for example, saw annual flood insurance rate increases from $2,000 to $10,000 under the Biggert-Waters Act.
In January, the Senate passed a bill which called for a four-year delay of the rate increases imposed by the Biggert-Waters. House leaders, however, wanted a more permanent fix, and they also wanted to avoid adding to the insolvency of the NFIP. Thus, the Homeowner Flood Insurance Affordability Act was born. The bill proposes, among other things: (1) to roll back certain rate increase “triggers” so that policyholders will no longer face rate increases as a result of the sale of a home or a lapse in coverage; (2) to provide a refund for those who already got hit under the foregoing provisions; (3) to restore “grandfathering” so that homes and businesses that were previously built to code and later remapped into a higher risk area by FEMA won’t face rate increases due to the remapping; and (4) to impose a cap on FEMA’s ability to raise annual insurance premium rates. Under the bill, FEMA can still increase premiums for owners of homes built before the flood insurance rate maps, but the increases have a hard cap of 18 percent per year (down from 20 percent under Biggert-Waters), and will typically range from only 5 percent to 15 percent.
President Obama is expected to sign the bill into law when it reaches his desk.
The policyholder, Millennium Inorganic Chemicals, Ltd., processed titanium dioxide at its facility in Western Australia, using natural gas that it received via a pipeline. It purchased the gas from Alinta Sales Pty Ltd., a retail gas supplier. Alinta, in turn, purchased the gas it supplied to Millennium from others, including Apache Corporation.
Faced with what she described as “an onslaught” of lawsuits, the district’s Chief Judge Carol Bagley Amon ordered the clerk to open a miscellaneous civil case captioned “In Re: Hurricane Sandy Cases,” Docket No. 14 MC 41, on January 10 “for the purposes of Pretrial Case Administration in all actions seeking insurance coverage for damage caused by Hurricane Sandy.” She simultaneously directed three magistrate judges “to evaluate and make a recommendation regarding how to best handle all Hurricane Sandy cases.”
Peerless Insurance Company issued a $1 million fire insurance policy to Executive Plaza. This gave Executive the choice to select payment of “actual cash value” or payment of “replacement cost.” The policy also provided that Peerless would not pay the replacement cost for any loss or damage until the property had actually been repaired or replaced. Finally, the policy contained a suit limitation clause that required the insured to commence any legal action within two years from the date of loss.
In October of 2005, Hurricane Wilma damaged three apartment complexes in Broward County, Florida. The property manager for all three was Banta Properties, Inc., a company owned by various Banta family members. The individual family members also owned two of the three properties at the time of the storm, having sold the third one (Parkcrest Apartments) to an unrelated, non-party entity two months beforehand.
The Preislers owned a dairy farm with cattle, and they used a well to stock a pool on the property. For several years, they had defendant Kuettel’s Septic spray several thousand gallons of septage on their farmland. Kuettel’s Septic was in the business of removing, hauling, storing and disposing of the substance, which comes from septic tanks, grease traps, floor pits, and car washes. It is disposed of by either taking it to a treatment facility or by spreading it on farmland as a fertilizer. It contains high levels of nitrogen.
Of course, when we’re dealing with commercial construction and property insurance, the most significant incentive for “going green” is probably economic. Over time, green buildings can reduce operating costs, improve employee productivity and satisfaction (a happy employee is a productive employee!), enhance asset value and profits, generate a better return on the owner’s investment (e.g., higher rents, sales prices and occupancy rates), reduce liability risks, and optimize the performance of a building during its life-cycle. There are also federal, state or local tax incentives for certain types of green construction.
On November 27, 2013, an intermediate level Texas court handed down an opinion addressing the extent to which a policyholder’s claims for a covered loss survive foreclosure. Peacock Hospitality, Inc. v. Association Casualty Ins. Co., 2013 WL 6188597 (Tex.App. San Antonio) arose after the policyholder Peacock Hospitality (“Peacock”) made claim against its property insurance carrier, Association Casualty Insurance Company (“Association Casualty”), for water damage from frozen pipes at a Holiday Inn. The loss occurred on January 9, 2010.
Adams v. Cameron Mutual Ins. Co., 2013 Ark. 475 (Ark., Nov. 21, 2013) arose after a tornado damaged the Adamses’ home in Mena, Arkansas. Their homeowners insurance carrier, Cameron Mutual Insurance Company, depreciated the entire repair estimate including the labor-only services such as the removal of roof decking, siding, and carpet and vinyl flooring. The policyholders asserted that the contract of insurance did not allow for such depreciation, and they brought a would-be class action against the insurer in the Western District of Arkansas. The federal court then certified the following question to Arkansas’ Supreme Court:
The question came to the forefront in Juan Pinzon and Jaqueline Espitia v. The First Liberty Ins. Corp., 2013 WL 5487027 (M.D.Fla., Sept. 30, 2013), a breach of contract action under a homeowners insurance policy. The insureds contended that their property had suffered damages from sinkhole activity, but First Liberty denied the claim after securing a professional engineer’s report that concluded that “none of the damage at the Pinzon & Espitia residence are [sic] structural damage as defined by the Florida Statutes.” A lawsuit followed. After removal, First Liberty filed for summary judgment and requested that the court apply the narrow five-part definition of “structural damage” adopted in 2011 to the insureds’ claim.