Last Modified: Tuesday, May 28, 2013 5:44 PM
Louisiana’s congressional delegation is mounting a two-front counter-attack against legislation that, if unchecked, will lead to huge increases for flood insurance premiums for business and homeowners.
The culprit is the 2012 Biggert-Waters Flood Insurance Reform Act which was crafted and passed by Congress to abolish federal subsidies for the National Flood Insurance Program. But the unintended consequences, experts say, are likely devastating rate hikes for flood insurance.
Flood insurance for homes designated in V or A zones subject to flooding could double for the owners in four years. One couple in St. Charles Parish southwest of New Orleans received a flood insurance premium bill for $28,000 after the Federal Emergency Management Agency changed the flood elevation in the last few months and placed the couple’s home in a flood zone.
That type of rate increase will likely put home owners in dire circumstances, and may cause some to abandon their homes.
Rep. Cedric Richmond, D-New Orleans, has teamed with Rep. Maxine Waters, D-Calif., the co-author of the Flood Insurance Reform Act, to file legislation to delay increases in the insurance rates. Congressman Charles Boustany Jr., R-Lafayette, whose Third District comprises all of southern Southwest Louisiana, joined Richmond and Waters as did most of the rest of the Louisiana’s delegation in the U.S. House.
One the Senate side, Mary Landrieu, D-La., introduced legislation intended to correct Biggert-Waters. Named the Strengthen, Modernize and Reform The National Flood Insurance Program, or SMART NFIP, it would delay flood insurance premium increases and repeal provisions preventing new owners of homes to continue with subsidized rates.
“Flood insurance must be affordable, accessible and self-sustainable. Biggert-Waters only addressed self-sustainability at the cost of homeowners in Louisiana and across the country living around water,” Landrieu said. “... Flood insurance is not just about business and commerce. It is about culture; it is about a way of life; it is about preserving coastal communities; and it is about being resilient in storms.”
With more than 486,000 flood insurance policies sold in Louisiana last year, Landrieu has good cause to fight for her constituents. She’s likely to pick up some powerful allies along the way, seeing that Florida ranks first nationally in the number of flood insurance policies sold, followed by Texas, Louisiana, California, New Jersey, South Carolina, New York, North Carolina, Virginia and Georgia.
Removing the federal supplement for flood insurance sounds good in theory, but it also stands to punish business and homeowners who have followed the rules and now may face economic hardship.
This editorial was written by a member of the American Press Editorial Board. Its content reflects the collaborative opinion of the Board, whose members include Bobby Dower, Jim Beam, Crystal Stevenson and Donna Price.