In an effort to reduce costs for homeowners facing big increases in flood insurance premiums, Attorney General Martha Coakley and Massachusetts House Speaker Robert DeLeo on Wednesday introduced legislation that would limit how much coverage homeowners have to buy.
Under the proposed legislation, banks and lenders would be prohibited from requiring homeowners to purchase flood insurance for more than their outstanding mortgage balance. By tying the amount of flood insurance coverage to the mortgage, instead of the total replacement value of the home, premiums for some homeowners should decrease, Coakley’s office said.
The federal government is redrawing flood maps and phasing out subsidies to the national flood insurance program, forcing thousands of Massachusetts homeowners to buy flood insurance for the first time and raising the average premiums of existing customers by as much as 25 percent.
The changes have spurred protest in communities on the South Shore and some town’s are planning appeals.