Pressure Mounts to Delay Law

WHEELING – As many as one in four Wheeling residents could be adversely affected by a federal law intended to get the FEMA-run National Flood Insurance Program out of debt, according to Councilman Don Atkinson.

As more people find they can’t sell their homes due to soaring flood insurance premiums under the law – the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012 – the pressure is mounting on Congress to delay the changes wrought by a federal law passed last year.

This week, Wheeling City Council voted to send a letter to area representatives in Congress expressing frustration over the situation and urging them to support legislation that would postpone the increases. Rate hikes could be anywhere from six- to 15-fold in flood-prone areas such as Wheeling Island, neighborhoods along Big Wheeling Creek and many other communities, according to local insurance agents.

Atkinson, whose ward includes several neighborhoods along the creek, said he’s heard from a constituent whose annual premium increased from $1,100 to $5,800, and from another man on Wheeling Island who lost a deal to sell his home after he had already found temporary lodging elsewhere – and now is stuck with both houses.

“It could have a potentially devastating effect on Wheeling Island and other areas of the city as well,” Atkinson said.

The Biggert-Waters bill extended the NFIP through 2017, and was intended to help erase the roughly $25 billion in debt the program has racked up since 2005, largely due to massive numbers of claims related to natural disasters such as Hurricane Katrina, Hurricane Ike and Superstorm Sandy. Tacked onto a transportation funding measure, the bill passed with bipartisan support in both houses, including West Virginia’s entire congressional delegation.

Many legislators are backtracking on that support, however, as the law’s consequences become very real to their constituents.

U.S. Rep. David McKinley, R-W.Va., is one of 141 co-sponsors of a bill known as the Homeowner Flood Insurance Affordability Act of 2013, which would delay implementation of many of the bill’s provisions for four years – allowing time for a feasibility study that was supposed to have been completed under Biggert-Waters, but never was.

“This issue is personal to me. As someone who had an office on Wheeling Island and has experienced severe flooding, I understand not only the devastation it causes, but also the financial strain flood insurance can place on household budgets that are already stretched thin,” McKinley said. “We have the potential to help people avoid skyrocketing premiums by delaying these changes.”

U.S. Rep. Shelley Moore Capito, who also voted in favor of Biggert-Waters last year, spoke during a House subcommittee hearing last week of the need to hold off on implementing the law. She agrees something needs to be done to make the flood insurance program financially sound, but without devastating those such as a St. Albans, W.Va., coal miner who she said saw the premium on his $160,000 home increase from $1,500 to $12,000.

“I do not believe the intent of this law was to foreclose on people who live near a river or at the base of a mountain,” Capito, R-W.Va., said. “This is a problem, but I believe it is a problem we can fix. We need to make sure that we properly address the dramatic shortfalls in the trust fund without further stressing a weak housing market.”

Representatives at the offices of Sens. Joe Manchin and Jay Rockefeller, both D-W.Va., did not respond to a request for comment.

Many of the provisions of Biggert-Waters took effect Oct. 1. Those with flood insurance who continue to live in their homes could see annual premium increases of up to 20 percent until they reach “full-risk” rates, and commercial properties will see annual premium increases of up to 25 percent until they reach full-risk rates, as will non-primary residences such as vacation homes.

However, the full-risk rates kick in immediately for any new policies under the law, a potential deal-breaker for those who want to buy or sell property in an affected area. Federal law requires mortgage holders to obtain flood insurance in an amount equal, at minimum, to the value of their loan.