Moves to match US flood cover pricing to risk have hit a setback, with the Senate passing legislation to curb premium rises under the National Flood Insurance Program (NFIP).

Premiums in some flood-prone areas soared under the Biggert-Waters Flood Insurance Reform Act of 2012, when insurance under the NFIP began to be priced to risk.

Property values fell and there were fears insurance costs could choke economic development in areas such as Louisiana and Florida.

The new Homeowner Flood Insurance Affordability Act sets ceilings on premium increases.

It restores “grandfathering” of policies in areas with new flood maps and reinstates subsidies for some properties that are bought and sold.

The Biggert-Waters Act was intended to address the NFIP debt and discourage development in flood-prone areas.

The Property and Casualty Insurers Association of America has praised the new legislation for addressing “unintended consequences” of the Biggert-Waters Act.