Flood insurance should be a top priority for the Senate | Editorial

With the National Flood Insurance Program set to expire Friday (Dec. 8), Congress is considering a two-week extension that could allow time to pass long-term legislation renewing the program.

Normally, adding that little time wouldn’t be the best choice. Policyholders and the housing market need greater stability than a two-week reprieve can provide.

But in this case the short timeframe may be the best way to keep up pressure on Congress to pass one of the reform bills pending in the Senate.

The flood insurance program is already operating under a temporary extension passed by Congress in September as part of a broader budget agreement, which ends Friday. Another short-term spending deal is proposed through Dec. 22.

The House agreed in mid-November on legislation renewing the flood insurance program for five years, but the Senate has two bills of its own that are stronger.

Louisiana Sen. Bill Cassidy, a Republican, and New York Sen. Kirsten Gillibrand, a Democrat, crafted a bill that would reauthorize the flood insurance program for 10 years and make it more stable. Their bill keeps grandfathered rates in place to prevent existing policyholders from being hit with large rate increases, expands private coverage options, increases flood mitigation and calls for high-tech mapping to more accurately assess risk. The grandfather provision is vital to protect policyholders who built to FEMA’s specifications but later may be put into a different classification because of new regulations or flood maps.

New Jersey Sen. Bob Menendez, a Democrat who was chairman of a task force that examined FEMA’s failings during Hurricane Sandy, also introduced a flood insurance reform bill. Louisiana Republican Sen. John Kennedy is a cosponsor on that legislation, which would reauthorize the flood insurance program for six years. Annual rate increases would be capped at 10 percent, which is significantly lower than the 25 percent allowed now. The bill also increases resources for mitigation to reduce flood risk, provides for high-tech mapping, limits compensation for companies that write flood premiums and strengthens oversight of insurers.

Both bills are expected to shore up the program financially but keep policies affordable.

The fear is that the flood insurance legislation passed by the House will push policyholders out of the program because of excessive rate hikes.

Three of Louisiana’s six House members — Republican Reps. Garret Graves and Ralph Abraham and Democrat Rep. Cedric Richmond — voted against the legislation out of concern over premium increases, among other provisions.

Majority Whip Steve Scalise of Jefferson negotiated changes to remove the most harmful provisions, including a prohibition on insurance for new buildings after 2021. But the House legislation is still problematic.

“This bill pays for the program on the backs of those who have played by the rules without making strong enough reforms to increase participation and mitigate flood risk,” Rep. Abraham, a Republican from Richland Parish, said after the House vote.

“People are going to walk away and say look I simply can’t afford this. And this is exactly the opposite of what we want to happen,” he said.

Congress ought to try to draw more homeowners into the program. Caitlin Berni, vice president of policy and communications for Greater New Orleans Inc., made that point in her June testimony before the House Committee on Financial Services. “Adopting policies that encourage more people to buy flood insurance will help to bring the program’s costs in line with revenues in a responsible way and help communities recover more quickly…,” she said.

Increasing the number of policies and the “coverage in force will bring greater stability to communities and provide greater protection for the federal treasury,” she added. To achieve that, premiums must be reasonable and affordable.

It’s up to the Senate to make sure they are.

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