Flood Rates Spur Action

WHEELING – As a bill in the House of Representatives that would delay massive flood insurance premium increases for thousands of local home and business owners languishes in committee, some members of the West Virginia House of Delegates hope their collective voice will spur their federal counterparts to move the legislation forward.

Speaker Tim Miley, D-Harrison, announced this week that House of Delegates leaders plan to introduce a resolution during the upcoming session urging Congress to act on the bill, known as the Homeowner Flood Insurance Affordability Act of 2013, sooner rather than later. That measure would delay provisions of the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012, which was intended to get the FEMA-run National Flood Insurance Program out of about $25 billion in debt.

Delegate Randy Swartzmiller, speaker pro tempore, said staff members are in the process of drafting the resolution, and he expects it will be taken up early in the session, which begins Wednesday.

Swartzmiller, D-Hancock, said he understands the need to shore up the NFIP following massive losses from Hurricane Katrina, Superstorm Sandy and other natural disasters.

But he believes it is grossly unfair to force inland property owners in states such as West Virginia to pay for the destruction of beach-front dwellings that are repeatedly pummeled by hurricanes and tropical storms.

He pointed out West Virginians pay more for automobile insurance than people in many other areas in the nation, due to circumstances that create a greater risk for loss – winding roads and a high deer population, for example.

“I don’t see anyone on the coastline paying for that for us, to lower our premiums,” he said.

Delegate Erikka Storch, R-Ohio, said she is directly affected by Biggert-Waters. Her home in Woodsdale was untouched by the 2004 flood that caused destruction around the Ohio Valley, but is considered to be within the floodplain. As a result, she’s bracing for premium increases that, had she known they were coming, likely would have prompted her to buy a home elsewhere.

Storch said she will vote for the resolution when it is introduced, but she’s not confident it will have much effect.

“Sadly, it’s not enough, I don’t think,” she said.

Storch believes federal law concerning flood insurance primarily protects lenders, not homeowners. She pointed out property owners aren’t required to carry enough coverage to replace their homes or businesses, just enough to pay off the remainder of their mortgage, if they have one.

“It’s to make the banks whole – the banks that were bailed out by the federal government a few years ago,” Storch said.

Storch believes that if the new premiums remain in effect, the NFIP eventually will find itself in similar financial straits once again. She predicts that other property owners like her – whose buildings are in the floodplain but at minimal risk of sustaining significant damage – will simply stop carrying flood insurance once their mortgages are paid off.

And when those people can’t sell their property because it would cost a new owner too much to insure, “you’ll just pass it off to somebody else in your family,” Storch said.

Delegate Ryan Ferns, R-Ohio, believes Biggert-Waters was “thoughtless legislation.” But he believes his colleagues’ resolution will fall on deaf ears.

“Rather than drafting another toothless resolution, I think it is critical for the Legislature to get serious about legislation that will create a favorable business climate that makes West Virginia attractive to job creators and opportunities for West Virginians to earn a good living,” Ferns said.

Under Biggert-Waters, 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.

Swartzmiller said he was contacted by a constituent who thought she had her home sold, until the prospective buyer learned it would cost $8,000 per year to insure the property. Local insurance professionals have said the increases for new policies could be anywhere from six- to 15-fold.

The Homeowner Flood Insurance Affordability Act of 2013 would delay those premium hikes for four years, allowing for the completion of a feasibility study that was supposed to take place under the original legislation, but never did. It has 168 co-sponsors, including Reps. David McKinley, R-W.Va., Nick Rahall, D-W.Va., and Bill Johnson, R-Ohio.

The bill has been referred to the House Committee on Financial Services and the Committee on Rules, but there’s been no action taken on it since it was introduced Oct. 29.