June 17, 2018

Congress Tries to Mitigate Flood Insurance Rate Hikes

-A A +A

Congress Tries to Mitigate Flood Insurance Rate Hikes

Louisiana lawmakers are proposing fixes to blunt the increases in insurance premiums from last year's reform of the National Flood Insurance Program (NFIP) in both the House and Senate.

U.S. Rep. Bill Cassidy's (R-La.) amendment—which proposed to delay until Sept. 30, 2014 the flood insurance rate hikes that were passed last year—was added to the Homeland Security appropriations bill, which in turn was approved by the House. 

The 2012 law allowed rate increases of 20 percent or more in the NFIP, which has sustained about $20 billion in debt since 2005.  Cassidy's amendment will delay the phase out of "grandfathered" rates for subsidized rates on properties built before the NFIP started in 1968. Cassidy said a key in the amendment's passage was winning the support of Rep. Maxine Waters (D-Calif.), who co-sponsored the 2012 legislation to reform NFIP.  The appropriations bill now moves to the Senate.

In the Senate, Sen. Mary Landrieu (D-La.) offered an amendment to a pending farm bill which would speed up the mandatory affordability study process at the Federal Emergency Management Agency (FEMA), also adopted as part of the 2012 Biggert-Waters Act to reform the National Flood Insurance Program (NFIP).  The amendment would delay for three years a provision that ends subsidized rates for homes sold in areas considered vulnerable to flooding, as the premiums are so steep that they would make homes unsellable. 

It is unclear if the amendment will come up for a Senate vote.  U.S. Sen. David Vitter (R-La.), meanwhile, is working on legislation that would create a five-year phase-in for "actuarial based premiums" for homes that are sold and authorize local governments to help subsidize premiums for residents.  He says that while Louisiana residents are willing to pay higher premiums, the premiums in the 2012 law are unaffordable for them. 

"That will literally drive middle-class families out of their homes and out of their neighborhoods and make their American dream completely unaffordable.  That shouldn't be allowed to happen," he warns.

Sources: "U.S. House Passes a Delay to Flood Insurance Rate Increases," Advocate (June 6, 2013) and "Louisiana Lawmakers Try to Block Big Increases in Flood Insurance Rates," New Orleans Times-Picayune (June 4, 2013).

© 2013 Copyright Information, Inc.

Read more

Shoring up Flood Insurance Comes at a Cost