Coastal Lawmakers Seek Delays in Flood Insurance Changes, Rate Hikes
By: Andrew Taylor (Insurance Journal) July 2013
Just a year after Congress imposed significant changes in the government’s oft-criticized flood insurance program, howls of protest from homeowners facing higher premiums have coastal lawmakers pressing for delays that would preserve below-cost rates for hundreds of thousands of people in flood-risk areas.
The government can’t say how many people could confront higher premiums, but homeowners in places like Staten Island, N.Y., along the battered New Jersey coast and in low-lying areas of Louisiana, Florida and Texas face the prospect that new government surveys could produce flood insurance premium increases so big that they could be forced from their homes or see their market value plummet.
“That’s insane,” said Robert Taylor, a homeowner in Des Allemands, La. Taylor said the new law and flood survey would bump his premiums from $400 to more than $28,000 a year. “This community has been here since 1923 and has never, ever flooded. Ever.”
At issue is a premium spike driven by a new flood map from the Federal Emergency Management Agency that says Taylor’s home is 6 or 7 feet below flood stage. The map, however, doesn’t take into account a levee built 80 years ago by the local government that protected the community through hurricanes Katrina, Rita and Isaac.
The federal flood insurance debate is the intersection where efforts to root out waste and abuse run into real-world impacts on people. The aim is to end taxpayer bailouts of the flood insurance program, even if the overhaul forces people from their homes, reduces real estate values and alters the fabric of communities.
