Senators want break on flood insurance increase
Louisiana’s senators are seeking to delay increases up to 25 percent in National Flood Insurance Program premiums.
Sen. Mary Landrieu, D-La., said, “The average premium in Louisiana is already $2,400 a year, but that figure could go up 20 to 25 percent for certain premiums under these proposals. That is why I have called on FEMA to delay these rate increases until it completes a study on premium affordability and we decide how to address those findings. I support strengthening the National Flood Insurance Program but FEMA must find a balance between a financially sound program and affordable policies for middle class Louisianans.”
Sen. David Vitter, R-La., said he is working with local governments and FEMA to make sure they’re getting proper credit for all flood structures.
Luke Bolar, a Vitter spokesman, said the senator also is looking into legislation that would require new rates to be phased in for new homebuyers of pre-firm properties like they are for everyone else to ensure there isn’t a disincentive to purchasing flood insurance and that home closings aren’t lost because of higher flood insurance costs.
According to FEMA, there are about 486,000 flood policies in the state, with about 82,000 of those being subsidized. The rest already pay the actuarial rates. Of the 82,000 roughly, 50,000 are scheduled to keep their subsidies until they sell, get flooded multiple times or let their policies lapse.
Parish Economic Development Director Frank Fink said economic development in the parish could be affected by flood rate increases.
“If (premium cost) goes up more than the neighboring parishes do, then we would be at somewhat of a disadvantage. We do have quite a few areas in the parish that are above the 100-year flood plan so they would not be affected on flood insurance,” Fink said.
Fink said if a business is going to need flood insurance and is in an area where it’s required, the insurance is going to cost more. However, if the parish is on an equal playing field with neighboring parishes, it may not have much of an effect on development, Fink said.
Erin Doner, Landrieu press secretary, said the senator has urged FEMA to delay increasing premium rates for policy holders with National Flood Insurance Program coverage.
In a letter to FEMA Administrator Craig Fugate, Landrieu, along with Sens. Max Baucus, D-Mont., Frank Lautenberg, D-N.J., and Robert Menendez, D-N.J., wrote “these steep increases will place a great burden on the budgets of many hardworking and low-income homeowners who are required to purchase NFIP coverage.”
As part of the Biggert-Waters Flood Insurance Reform Act, FEMA is required to study the affordability of national flood insurance program premiums and the effects of increased premiums on low-income homeowners, Doner said.
In her letter, Doner said Landrieu called on FEMA to release this report as soon as possible, and urged FEMA to “refrain from noticing any increases in premium rates until this report has been released and Congress and the public are given time to study it.”
The rate increases come as part of the flood reauthorization that Congress passed in July.
Landrieu expressed her concerns about the affordability of flood insurance for Louisiana’s middle class families when Congress was debating reauthorizing the program, her office said in a news release.
No amendments were allowed during the debate, including one authored by Landrieu that would have created a pilot program to provide means-tested assistance to working and middle class individuals to help purchase flood insurance. Landrieu’s amendment would have helped many Louisiana homeowners and small businesses now facing premium increases, Doner said.
Last week, Landrieu chaired a Small Business Committee roundtable on access to credit and disaster recovery for small business, which included an extended discussion on the importance of affordable flood insurance for those living along the nation’s coasts.
“Affordable flood insurance is a real challenge to the sustainability of small business in America. In Louisiana, we are running the Mississippi River for the entire country,” Landrieu said. “We are developing oil and gas that powers our cars and homes, and we are supplying one-third of this country’s seafood. We must ensure that the flood insurance our small businesses get is insurance that they can afford. It’s not just for their benefit, it’s for the benefit of the entire country.”
For 2011, FEMA listed Louisiana in the top 10 states for both number of claims and total claim payments.
Louisiana was seventh with a total of 2,032 claims and 10th for claims payments of $42.2 million in the same timeframe, according to statistics on the floodsmart.gov website.
Rep. Charles Boustany, R-Louisiana, did not return requests for comments.