House’s Flood Bill May Get Vote

WHEELING – The House of Representatives may vote Thursday on its own bill to provide relief for property owners struggling to pay soaring flood insurance premiums, Rep. David McKinley said.

“We’re pleased the House Republican leadership listened to our concerns and cleared the way for a vote to ease flood insurance rate hikes currently facing millions of Americans and thousands of West Virginians,” McKinley, R-W.Va., said. “We’re hopeful this will pass the House and the Senate quickly.”

Passage of the measure – introduced by Rep. Michael Grimm, R-N.Y., and co-sponsored by 234 others, including all three West Virginia representatives and Rep. Bill Johnson, R-Ohio – could set up a showdown between the House and Senate, which on Jan. 30 approved an outright four-year delay of premium increases under the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012.

According to McKinley, the House bill provides a reprieve for property owners facing the most severe increases but “is fully paid for” – unlike the Senate version, which the Congressional Budget Office projects would increase program debt by $2.1 billion over the next decade.

The House plan would recoup lost revenue from the more gradual increases by tacking an annual surcharge onto all NFIP policies – $25 for primary homes and $250 for other properties including commercial, rental and secondary homes.

The House bill provides more modest reform by capping annual National Flood Insurance Program premium increases at 15 percent and ending immediate jumps to “full-risk” rates when a property is sold. It provides refunds for homes purchased after the enactment of Biggert-Waters in July 2012 but before most of its provisions took effect Oct. 1.

Many of those who purchased a home during that period believed they would be “grandfathered in” under the subsidized rates but later found out they would be charged full-risk premiums immediately – in some cases, 10 times higher than what it previously cost to insure the structure.

The House proposal also allows for premiums to be paid in monthly installments and allocates funding for FEMA to perform the affordability study as mandated by Biggert-Waters but never completed.

House Speaker John Boehner firmly opposes the Senate fix.

If neither side approves the other’s plan, then representatives of both chambers likely would meet in a conference committee to resolve differences between the proposals.

Opponents of Biggert-Waters claim it unfairly assesses risk, forcing inland areas that rarely flood to pay more to hold down rates for those in coastal areas. The law affects at least 12,000 properties in West Virginia – more than 2,000 of which are located in the Northern Panhandle, with neighborhoods such as Wheeling Island and those along Big Wheeling Creek particularly hard-hit.

But representatives of, a coalition of consumer advocates, insurers, housing agencies and environmental groups have come out against the House bill, saying it undermines the purpose of Biggert-Waters – financially shoring up the NFIP, which is almost $25 billion in the hole, mostly from claims resulting from major disasters such as Hurricane Katrina in 2005 and Superstorm Sandy in 2012.

“The proposal will all but ensure that FEMA has to seek increased borrowing authority the next time there is a big storm, so NFIP’s debt will eventually reach unsustainable levels while providing no recourse for eventually containing that debt. This also masks risk, taking away the incentive for people to protect their lives and property,” coalition representatives said in a statement.

An insurance industry lobbying group also is urging the House to vote down the bill, saying it would continue to keep private companies from entering the flood insurance market.

“No insurance company can compete with the low rates being offered by Congress, or ask their other policy holders to make up the loss. Many in Congress have suggested that the government shouldn’t even be in the business of flood insurance, but a vote for the House bill is a vote to keep the government involved permanently,” said Matt Brady, director of federal public affairs for the National Association of Mutual Insurance Companies.

The measure is House Bill 3370.