The floodgates have opened on the legislative debate
surrounding flood insurance. On Monday, followed by remarks by Senator Robert
Menendez, D-NJ, the Senate voted 86-13 to begin debate to delay the increases
mandated by the 2012 law for four years.
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Proponents of the Homeowner Flood Insurance
Affordability Act say that the price of coverage is too high for many
policyholders making their homes unaffordable. Fifty five percent of Americans
live within 50 mile of the coast. The National Flood Insurance Program
insures more than 5.5 million properties across all 50 states. Rate increases affecting
premiums all over the country. Proponents say that while The 2012 Biggert-Waters
law was intended to make the flood insurance program fiscally solvent, it
forces changes that are far too large and fast causing people to lose their
homes.
Menendez acknowledges, “The flood insurance program
needs to be put on a more solvent trajectory, (but) we first need to understand
the scope of these changes and be sure the mapping process used to set these
rates is accurate. We need to understand the impact that these dramatic changes
in Biggert-Waters will have on the housing market before it’s too late.
It requires FEMA to increase rates dramatically, even
before FEMA knows the scope of these changes or how they will impact program
participation. That’s why our bill would impose a moratorium on the
phase-out of subsidies and grandfathers included in Biggert-Waters for most primary
residences until FEMA completes the affordability study that was mandated in
Biggert-Waters and proposes a regulatory framework to address the issues found
in the study.”
The White House is concerned that delaying the law will
further erode the National Flood Insurance Program, which is already $24
billion in debt reducing FEMA’s ability to pay claims by all policyholders in
the future.
In a statement, the Office of Management and Budget says,
“FEMA is working diligently with the National Academy of Sciences to conduct a
study on insurance affordability for economically distressed policyholders. The
Administration recognizes that many policyholders may be challenged financially
by the new rates and remains committed to working with the Congress to develop
approaches that ensure economically distressed policyholders are not unduly
burdened while maintaining the financial stability of the NFIP.”
According to Sen. Mary Landrieu, D-LA, “The bill had
good intentions, (but) it’s had very detrimental consequences, and so this bill
that we’re going to go to debate on, the Menendez-Isakson bill, is really a
good-faith attempt to correct some of the problems with the Biggert-Waters and
to lead us in a direction to a place where the country can have a public-private
partnership for flood insurance that actually works.”
With the delay secured, the Senate will consider
several amendments culminating with a final vote as early as Wednesday.
Read more at: Congress.Gov.
Flood
damaged home as a result of Superstorm Sandy, Far Rockaway, NY image via
Shutterstock.