FEMA making flood insurance changes

The American Press

FEMA and flood insurance

Sometimes the best way to prod Congress to do something is to take the initiative, and that is exactly what the Federal Emergency Management Agency is doing in the flood insurance field. Congress can’t seem to agree on how to save the debt-burdened program.

FEMA officials want to loosen rules around private insurers offering their own flood policies and have purchased more reinsurance from companies to offset future losses, according to a report in The Advocate. The changes come as the program that is already $30 billion in debt pays more claims from 2017 hurricanes.

One National Flood Insurance Program official said opening up the flood insurance competition would benefit federal taxpayers by hopefully reducing the number of homeowners who go without coverage. 

The reinsurance move means if claims top $4 billion, the reinsurance coverage will kick in to cover the next $1.46 billion in losses.

An official with the American Insurance Association said the flooding events of 2016 and 2017 clearly show that too few property owners purchase flood insurance. He said there needs to be more ways to expand consumer options by expanding private coverage.

Louisiana members of Congress have their own ideas about how to save the flood program by reducing its debt, but each is different. U.S. Sen. John Kennedy, R-La., believes in sharing more coverage with private companies. U.S. Sen. Bill Cassidy, R-La., is co-author of a plan that promotes trimming back compensation to “Write Your Own” companies as a way to pull more money into the program.

House Majority Whip Steve Scalise, R-Jefferson, brokered a compromise that got an NFIP bill through the House. It split the congressional delegation down the middle. Those against it felt it was potentially devastating to homeowners in the state.

Scalise, however, vowed to protect homeowners whose rates are grandfathered in under the current program so those who played by the rules won’t be penalized or kicked out of the program.

U.S. Rep. Garret Graves, R-Baton Rouge, liked the idea of opening up the market, but said FEMA should have left changes to the NFIP to Congress. He said it jeopardizes a long-term fix. If others in Congress feel that way, FEMA may be doing exactly what it takes to spur Congress to finally fix the flood insurance program.

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