Flood insurance rate relief closer

Power plant moving on schedule
March 11, 2014
Lafourche tax assessor dead at 58
March 11, 2014
Power plant moving on schedule
March 11, 2014
Lafourche tax assessor dead at 58
March 11, 2014

Local officials are calling last week’s passage of the U.S. House bill that would protect homeowners from looming runaway flood insurance hikes a victory for now.

But protection from crippling increases that were called an unexpected byproduct of the Biggert-Waters 2012 flood insurance reauthorization bill still needs Senate approval and the signature of President Barack Obama to become law.

Local officials who pushed for the relief are confident that will happen, but are watching closely.


“The current legislation puts some safeguards to prevent the skyrocketing rates,” Terrebonne Parish President Michel Claudet said. “It also removes the sale trigger, the increases after new flood maps are accepted and it even refunds the money paid by poor unsuspecting citizens who bought after July 6, 2012, without knowing the impacts of Biggert-Waters. Rates will still increase for severe repetitive loss properties, vacation homes and certain business properties.”

Terrebonne and Lafourche Parish officials are still involved with the mapping process, which will still affect insurance rates.

They are also still stinging from the vitriol spawned by debate over the bill, with some anti-protection lawmakers fuming that it meant working poor people would be subsidizing wealthy seaside mansion owners.


“First, the maximum insurance is $250,000. That is not enough to cover mansions,” Claudet said. “The vast majority of policyholders are people like those in Terrebonne that are hard-working individuals. If that statement were actually true it would never have received the super majority that it received in the Senate and the House.”

Claudet also noted that a $24 billion deficit in the flood insurance program, which some lawmakers said necessitated upward rate reform, was born not of rate disparities but was the fault of the federal government itself.

“They have never addressed that the deficit in the program was caused by $17 Billion from Katrina which a federal judge declared was because of negligence and the fault of the Army Corps of Engineers,” Claudet said.


In Washington Thursday, Sen. David Vitter, R-La., called for fellow senators to vote favorably.

“Both the Senate and now the House have come together in a major, bipartisan way to fix our National Flood Insurance Program. This is great news because, unless we fix these very real problems, we’d have even greater problems in every state in the country,” Vitter said. “The House bill is stronger and more significant, mostly because the reforms are permanent, and it passed by a huge margin. The Senate must vote on this bill as soon as possible, and the only realistic way that will happen is if (Majority Leader Harry) Reid schedules floor time for the bill.”

Rep. Bill Cassidy, R-Baton Rouge, and Sen. Mary Landrieu, D-La., issued statements regarding the passage of the House bill, HB3370. Cassidy is challenging Landrieu for her seat; each has worked hard for flood insurance rate reform in their respective chambers and each skillfully avoided mention of the other in comments on the House bill, although Cassidy did plug Vitter.


“The overwhelming support for the legislation by elected Louisiana officials like Senator Vitter and local parish presidents, as well as national stakeholder organizations, recognizes that the House bill addresses the concerns of those impacted by FEMA’s implementation of Biggert-Waters. By providing predictability and stability to Louisiana families and businesses, the legislation as amended will provide long term relief.”

Cassidy wrote to Reid the day after the bill’s Mardi Gras passage, asking that it pass through that body unscathed and unchanged, for transmittal to the Oval Office as rapidly as possible.

“Homeowners have waited long enough and this legislation is the strongest to date in providing long-term and predictable relief from unrealistic flood insurance rate increases,” Cassidy’s letter states.


Landrieu said she had worked with Rep. Maxine Waters, D-Calif., and Cedric Richmond, D-La., and a “strong coalition of supporters of flood insurance reform” to help negotiate key provisions of the House bill.

Important elements of the legislation now passed include affordability provisions, including an annual individual property rate cap. An “affordability target” will aid in keeping rates at less than 1 percent of a property’s total coverage.

“The compromise legislation the House passed … represents nearly two years of arduous work by a broad coalition of business groups, community leaders and individuals that has fought to stop draconian rate increases on homeowners,” Landrieu said after the House bill passed, recalling how the devastation of 1965’s Hurricane Betsy caused private insurers to flee the market “making it necessary for the federal government to step in. For these communities to rebuild, the National Flood Insurance Program had to be created to establish building standards in flood prone areas and provide affordable flood insurance to middle class families. Affordability was one of the primary goals then and remains an essential priority still today.”


That affordability, she noted was eliminated by the 2012 reauthorization bill.

“The Senate will carefully review the details of the House bill and will move the process forward,” Landrieu said.

She noted that a 2017 reauthorization of the flood insurance program could result in a battle for communities, and suggested that “stakeholder groups” should be prepared to protect affordable rates yet again.


One of the most important components of the bill according to the priorities of local officials is its reinstatement of grandfathering, which ensures continued considerations under former rates even if for properties owned by the same people before changes in the law.

Provisions in the House bill include a property rate cap of 18 percent, along with the 1 percent rule.

Additional provisions include:


– Full disclosure requirements making FEMA clearly communicate what an individual property owner’s flood risk is and explain what higher deductibles mean for property owners if they file a claim.

– A requirement that FEMA must report how new rates and surcharges are affecting small businesses, churches and nonprofits within 18 months.

– Language requiring that FEMA’s flood maps are accurate and reliable, along with improved coordination and cooperation with communities during the mapping process.


– Reimbursement of communities that successfully appeal their FEMA flood maps.

– More mitigation options, particularly for urban homeowners.