Reshaping the national flood insurance program has been a continuing task for senators and representatives for several years. The program requires property owners with federally insured mortgages to purchase protection if their homes are in certified flood plains.
On Tuesday, U.S. Sens. Thad Cochran, R-Miss., and David Vitter, R-La., introduced legislation to amend how major rate increases are implemented. Rates could go up by 25 percent or more as early as 2014 for some ratepayers, and the rates would be non-negotiable.
Cochran is the primary co-sponsor of the Responsible Implementation of Flood Insurance Reform Act (S.1098), which, his Washington office said, “was developed in response to increasing concerns from Mississippians about the prospect of significantly higher flood insurance rates…”
Cochran’s plan would provide delays for the phase-in of new rates to allow additional community planning and to assist “state and local governments (in developing) subsidized flood insurance, plus reform some Federal Emergency
Management Agency (FEMA) flood mapping procedures,” Cochran said.
This is what Cochran’s proposed law would do:
• Ensure that communities that were developing new maps by the end of 2013 will be able to maintain the grandfather rates.
• Allow a five-year phase-in of actuarially sound rates for newly purchased homes.
• Authorize state and local governments’ flexibility to subsidize homeowners’ flood insurance properties if they so choose.
• Enable 25 percent of mitigation funding in a given year to go directly to homeowners to support pre-disaster mitigation improvements.
• Prohibit FEMA from considering the level of federal funding or participation in a flood control structure project when determining the level of protection that the project provides the community; and
• Require that FEMA include all protections provided by any levee, dam or other flood control structure regardless of accreditation status before the flood insurance rate map or update may be finalized.
Cochran basically seeks a one-year delay, a request that is clearly reasonable given the protracted debate and work leading up to a reformed flood control plan.
Only a portion of those policies that are currently paying subsidized premiums would see premium increases of 25 percent. The 80 percent of all NFIP policies that already pay full-risk premiums will not see these large premium increases, but most policyholders will see a new charge on their premiums to cover the Reserve Fund assessment.
Austere times and rising expenses require reforms, but they should be fair.