• Credit: Steve Earley/The Virginian-Pilot

It has taken this long for the implications of last year's flood insurance reform bill, the so-called "Biggert-Waters Act," to sink in. But this spring, homeowners and realtors in coastal regions are waking up to what's about to hit them — and they're not happy about it.

If you're just joining us, the 2012 Biggert-Waters Flood Insurance Reform and Modernization Act was a reform package for the troubled NFIP (National Flood Insurance Program), a federally-backed and FEMA-administered insurance program that covers homeowners against the risk of flood damage to their properties (whether on the coast, or inland near a river or lake). The program ran up $18 billion dollars in red ink from unusually high payouts during the disastrous year of 2005, which saw four hurricanes strike the southern U.S., including the catastrophic Hurricane Katrina. Since that time, the program's authorization has expired over and over again, with Congress passing temporary re-authorizations to keep the NFIP on life support at the last minute (sometimes, in fact, after the last minute).

But last year, Congress ended the disruptive on-again off-again game and reauthorized the program for another five years. But the deal came at a price: included in the package were reforms to the rate structure for premiums paid by homeowners. The intent was to realign the income from premiums with the "actuarial" risk of flood damage and payouts — in short, to make the NFIP pay its own way without needing Federal bailouts to pay future claims.

Here comes the sticker shock. In flood zones across the U.S., homeowners accustomed to paying a few hundred dollars a year for flood insurance could find themselves paying $5,000, $10,000, even $20,000 to $30,000 a year for flood coverage that's capped at around $250,000 per event. And if a homeowner in a floodplain happens to carry a mortgage on the property, that insurance isn't optional — it's mandatory.

Expanded Floodplains
At the same time, there's another scary change coming. For years, FEMA has been re-drawing its coastal and rivering "Flood Rate Information Maps," or FIRMs, using advanced airplane-mounted laser ground scanners to map terrain, and applying sophisticated computer modeling to predict flooding scenarios. The result has been a whole new set of flood zone maps, phased in over years, region by region and state by state. In New Jersey, New York, Louisiana, and other states, these new maps often place homes and neighborhoods in a floodplain for the first time — a game-changer for homeowners accustomed to paying no flood insurance at all.

For some residents of the Louisiana delta, this one-two punch of new flood maps and new insurance rates is a catastrophe as bad as any flood. New Orleans TV and radio broadcaster WWL has the story ("Local leaders fight flood changes," by Chris Miller). Michael Hecht, CEO of New Orleans economic development alliance GNO, Inc., told WWL, "It would mean that homes that previously had flood insurance that was hundreds of dollars could see that go to tens of thousands of dollars, effectively making the home uninsurable, and so this would have the effect of taking the home out of the owner's balance sheet, taking it off the market."

Louisiana Senator Mary Landrieu is trying to stave off the change in Washington, at least temporarily, reported WWL in a related story ("Parish leaders fighting FEMA flood maps from sending rates skyrocketing," by Dennis Woltering). Landrieu is pushing an amendment to a water resources development act that's now before the Senate (called the WRDA) that would put Biggert-Waters on hold for a year while a workaround is devised. Said Landrieu: "I hope my amendment will pass, and we can stop these rate increases and go back to the drawing boards and figure out how to make the program solvent without putting the burden on the backs of families and businesses in our state."

Landrieu says she already tried to get FEMA to slow down the implementation of the new rates, reports the Houma Daily Courier ("Delay sought for insurance cost hikes," by Nikki Buskey). Said Landrieu: "I have been warning about these increases for some time and calling on FEMA to address these rate increases for nearly a year. We don't have time to wait for FEMA — we need to stop these rate increases now."

Meanwhile, on the Outer Banks of North Carolina, real estate brokers are trying to push back against the new NFIP realities, reports the Virginian-Pilot ("2012 law could send flood insurance premiums soaring," by Jeff Hampton). Willo Kelly, government affairs director for the Outer Banks Association of Realtors, called the rate increases "self-defeating," arguing, "The unintended consequences will be that hundreds of people will be forced into foreclosure."

And on the Jersey Shore, a movement called "Stop FEMA Now" is all about getting the agency to roll back its new maps and its rate increases. The Daily Record is following that story ("Stop FEMA Now: Movement builds against rules," by Kristi Funderburk). Founded by George Kasimos, a Jersey Shore homeowner who got flooded out by Sandy, "Stop FEMA Now" is attracting lots of press.

FEMA hasn't made any direct response to Kasimos. However, the agency does say that its "advisory" flood elevation maps, released earlier in the year, will be revised to take into account local terrain and obstructions that could reduce the flood hazard for some properties, according to the Star-Ledger ("Flood map updates could move homes out of most vulnerable flood zone," by Eugene Paik). FEMA's latest "working maps" feature "details that weren't available for the advisory elevations, most notably ground structures that could affect flooding," according to FEMA spokesman Darrell Habisch. But FEMA won't hold public hearings until it releases another revised set in August, called "preliminary" flood maps. If communities don't like that version, they'll have 90 days to file an appeal.