New hurdles to flood insurance

Local officials are ramping up their campaign to throw off a yoke of high flood insurance premiums that threaten to force people from their homes or abandon flood insurance for them, with the potential of seriously affecting the economy of south Louisiana and other places in flood-prone regions.

The battle is likely to occur on a steep slope. Some members of Congress – including an author of the bill that set the rate increase wheels in motion – have expressed understanding for the position in which this legislation has placed local property owners.

Lawmakers in New York and New Jersey – newly baptized into flooding awareness due to Hurricane Sandy – are also aiding their counterparts in Louisiana who are trying to head off the increases. But so far a silver bullet to address what some lawmakers have said are “unintended consequences” of a law designed to keep the flood insurance program afloat hasn’t appeared.

Those events had one local official, Terrebonne Parish President Michel Claudet, likening the flood insurance debacle to the British exile of Acadians from Nova Scotia in 1750, leading to their settlement of Louisiana.

“I want people to be aware there is a problem but for them to know it is not time to panic, yet,” the Cajun-rooted Claudet said Monday during an interview. “But if this thing comes in as they have planned it they will force us out of Louisiana like they did from Nova Scotia. I have already said that this will cause more damage to us than all the natural disasters we have experienced over the past 10 or 15 years.”

Claudet maintains the reference to the region’s Acadian ancestors is more than hyperbole.

On Friday Claudet, along with Lafourche Parish President Charlotte Randolph and other officials, met at the home of a man in St. Charles Parish who has never flooded and whose subdivision has never flooded, but whose insurance rate is expected to rise from just over $600 per year to an estimated $28,000.

Senate Setback

Claudet, Randolph and others are promising to do everything possible, with the help of federal elected officials and responsible agencies, to stave off the increases.

“We will continue to monitor this very carefully,” Randolph said. “In fact, the group is going to have a weekly conference call to continue to pursue some relief from this bill.

Certainly, this is the most important issue facing this parish right now. We have heard from more people than we’d like that they have put projects on hold until this is resolved, whether it be commercial or residential, because they just don’t know what the future holds.”

Local officials suffered a setback earlier this month when a lone senator, Pat Toomey, R-Pa., kept an amendment to the law proposed by Sen. Mary Landrieu (D-La.) and Sen. David Vitter (R-La.) from being voted on by the full senate, invoking a senate rule that requires such matters to be unanimously decided.

“I want to make it clear that the senator from Pennsylvania, Patrick Toomey, is objecting to simply voting on the Landrieu-Vitter amendment,” Landrieu later said. “He most certainly is entitled to vote ‘no’ on our amendment, but I want the record to show that Sen. Toomey won’t even let us have a vote. This is a shame that we can’t even get a vote to postpone these flood rate increases to try to see if we could make flood insurance more affordable. And our amendment doesn’t cost anything.”

What It’s About

The Biggert-Waters bill was intended to fund the nation’s flood insurance program, which provides low-cost coverage to property owners.

But as the legislation made its way through Congress changes – most notably that the program would have to base its rates on actuarial information, like all other insurance companies – made for local problems.

Amendments included the elimination of a “grandfather” provision. The grandfathering has allowed homeowners who have had no major claims to continue paying affordable premiums, and for their properties to continue eligibility for low rates even when the property is sold to someone else.

The new law requires a new evaluation of the property, with the potential that higher rates will result.

Local officials have also complained that the flood insurance program, which relies on elevation maps from FEMA to determine risk, has not been given important information to aid in fair determination.

Levee systems and other flood-control structures in low-lying communities were not taken into consideration when rates were determined.

The new rates would not go into effect until next year.

Waters Redux

Rep. Maxine Waters, ranking member of the House Financial Services Committee, is one of the original bill’s sponsors.

Last week she expressed sympathy to states that will be severely affected by amendments tacked onto the bill resulting in the current firestorm.

“As one of the primary authors of the Biggert-Waters Flood Insurance Reform Act and a longtime advocate for the people of southern Louisiana, I can state that it was never the intent of Congress to impose the types of punitive and unaffordable flood insurance premiums that residents of southern Louisiana are currently facing,” she said. “I am committed to working with my colleagues in Congress and with FEMA to solve this problem.”

Claudet said that he and other local officials are conferencing every Tuesday by telephone, and that he has spoken with the Flood Insurance Program’s director, as has Vitter.

Negotiations on the FEMA maps, to ensure that local flood-protection features are acknowledged, has already begun. That’s one reason why Claudet said homeowners shouldn’t panic just yet.

“We are monitoring and going through the regulatory process to put the levees on the maps,” Claudet said. “We are also independently checking actuarial tables and actuarial rates. You don’t have that high a rate anywhere on insurance even for wind and hail. Louisiana officials are also seeking to partner with governments in Mississippi, Alabama and Texas as they gear up for the fight.

An impact study, Claudet said, is also being commissioned.

“This is egregious,” he said. “And we are also sending out examples and trying to educate people … They have looked at the worst possible scenarios and what we are trying to do is confront it legislatively, administratively and through the mapping process.”

One option being considered is an amendment prohibiting funding for implementation of Biggert-Waters through the Homeland Security Appropriations bill, which should be signed into law by Oct. 1.

GNO Inc., a New Orleans based non-profit, is assisting local government leaders with a path for the legislative plan and an exploration of more options, Claudet said.

As lawmakers continue to debate increases to the federal flood insurance program, locals are hopeful recent efforts to buffer storm surges will be enough to keep insurance costs affordable.

FILE PHOTO