Flood Insurance Rates Not Fair

It is interesting that many of the same members of Congress who argue for an end to so-called taxpayer subsidies for flood insurance have no problem at all with a much, much bigger subsidy scheme – Obamacare. But flood insurance subsidies are not what many Ohio Valley residents want. They are seeking simple fairness.

As thousands of Northern Panhandle and East Ohio homeowners and business people are learning to their shock, their federal flood insurance premiums are going through the roof. That is because of the Biggert-Waters Act, enacted in 2012 in an attempt to address the flood insurance program’s $24 billion deficit.

Many members of Congress who voted for the bill were shocked, too. They had expected the government would conduct an objective study of flood insurance rates before foisting big premium increases on policy holders.

That apparently did not happen. While nearly all of the $24 billion deficit is because of flood insurance claims in coastal areas, resulting from hurricanes and tropical storms, premium increases are hitting inland property owners very hard.

To judge by comments during a meeting on the issue this week, at least some premium increases are far out of proportion to the risk. During the meeting in Wheeling, real estate agent Missy Ashmore said it costs $8,000 a year to obtain $60,000 worth of flood insurance coverage for a building on Wheeling Island.

Do the math: That means that if the building was destroyed and rebuilt once every eight years, the federal flood insurance program would still turn a profit. That is not how Ohio River floods affect property owners. Floods are infrequent and almost never destroy structures.

Proponents of the increase insist that old flood insurance rates amounted to subsidies for property owners. Again, many lawmakers with that view see nothing wrong with millions of Americans paying higher health insurance rates to subsidize coverage for millions of others.

But no one we know is asking for flood insurance subsidies. They want only reasonable rates, based on actual risk.

Congress should delay the premium increases until a fair risk assessment is conducted, then rate increases are recalculated so that people in our area are not forced to cover the government’s failure to charge adequate premiums for coastal residents and businesses.