Sudden, sharp increases in flood insurance premiums, set to start as soon as this fall, have prompted howls of protest from property owners in coastal communities (and in flood-prone inland areas as well). Congressional passage of the "Biggert-Waters" bill prompted the increases last year, but now there's a move on Capitol Hill to stop the increases—or at least to delay the policy for a while.
The New Orleans Times-Picayune has this report ("Senators plan legislation to block flood insurance increases for 4 years," by Bruce Alpert). "The bill was developed by a geographically diverse coalition of eight senators representing states affected by the law, which was adopted by Congress in 2012 to make the flood insurance program more fiscally sound," reports the paper. "Supporters of the delaying legislation want to stop the insurance rate increases, which in some cases are 100% or 200%--or even 1,000%. About 20% of the nation's 5 million flood insurance policyholders are likely to see rate increases under Biggert-Waters, according to FEMA, which administers the program. Louisiana has 484,000 policyholders in the flood insurance program."
The new push would not repeal Biggert-Waters, but it would slow it down, reports the Times-Picayune: "Specifically, the bill would delay the rate increases until two years after FEMA completes an affordability study. The affordability study isn't expected for another two years -- so the impact of this provision would be to put off many of the premium increases resulting from the 2012 law for four years, if not longer."
Louisiana Senators Mary Landrieu and David Vitter are top Senate backers of the bill, joined by New Jersey Senator Robert Menendez. New York politicians are also backing the measure, reports Crains: ("Pols tout bill to delay flood insurance increases," by Joe Anuta). "Reps. Gregory Meeks, D-Queens, and Hakeem Jeffries, D-Brooklyn, stood near a bridge to the Sandy-damaged Rockaways in Queens to argue that the Homeowner Flood Insurance Affordability Act of 2013 is needed to keep residents still reeling from the storm from being forced out of their homes," Crains reports. "'Our communities were about to be hit with increased flood insurance premium rates that were speeding toward us like an out-of-control freight train,' Jeffries said. 'The bill that we've introduced is designed to stop that freight train dead in its tracks.'"
But the measure has opposition from the insurance industry, the Times-Picayune reports: ("Influential insurance group fights delay in flood insurance premium increases," by Bruce Alpert).
"The National Association of Mutual Insurance Companies (NAMIC), whose members sell and administer policies under the flood insurance program, said it would be a mistake to dismantle reforms approved only a year ago by Congress to make the program, now $28 billion in debt, more fiscally sound," the Times-Picayune reports. The paper quotes Jim Grande, senior vice president of federal and political affairs for NAMIC: "It's understandable, from a political perspective, that elected officials don't want to be seen as the reason for higher flood insurance premiums, and no one wants to see homeowners face a true hardship. At the same time, however, there are millions of policyholders who rely on the NFIP for flood insurance and who deserve a program that will be able to meet its obligations."
Countered Michael Hecht, president and CEO of Greater New Orleans Inc., a business group coordinating a national campaign to delay large premium increases: "Efforts to delay devastating flood insurance premium increases are about much more than doing what is politically popular--the proposed delays are about protecting the investments of taxpaying, law-abiding citizens across America while finding the right solution to fiscal solvency. Furthermore, the Biggert-Waters Act actually puts the solvency of the program at greater risk, because policyholders will be forced to drop insurance in droves due to unaffordable rate increases of 3,000% and more." Argued Hecht: "The fact is that to implement Biggert-Waters as it currently stands is both economically unwise and morally unjust."