House passes amendment to block huge hikes in flood insurance premiums

[TexasTowelie]

WASHINGTON - The House Wednesday night approved an amendment that bars FEMA from using its budget to implement a 2012 law that ends subsidized flood insurance rates for policyholders who, through no fault of their own, are remapped into a "below base flood elevation" status. It passed 281-146, but still needs Senate approval to become law.

Rep. Bill Cassidy, R-Baton Rouge, the sponsor of the amendment to a pending Homeland Security funding bill, said the clause has led to "unaffordable increases" for some flood insurance recipients. Cassidy mentioned some Louisiana residents are reporting that their future premium will run as high as $20,000 a year.

-snip-

Some Republicans objected to the amendment, saying Congress, by large pluralities, approved changes in the flood insurance program last year to make it financially sustainable. Rep. Lynn Westmoreland, R-Ga., said the same Louisiana members, now seeking to delay implementation of one part of the flood insurance law, all voted for it.

-snip-

But Rep. Maxine Waters, D-Calif., who helped author the 2012 flood insurance bill, said she anticipated higher rates for some homeowners, but not the astronomical increases some homeowners are facing. Rep. Cedric Richmond, D-New Orleans, told his colleagues that one South Louisiana homeowner reported his rates would jump from $365 a year to $28,000.

The complete story is at http://www.nola.com/politics/index.ssf/2013/06/house_amendment_to_block_huge.html#incart_river_default .

[bluedigger]

1. Maybe we should just end the program.

Homeowners can self insure, or find relief in the private market, if the government program isn't good enough for them.

[TexasTowelie]

2. There is nearly no insurers in the private market for flood insurance that isn't subsidized.

If there were, then the premiums for the policies would be virtually unaffordable.

It’S no surprise that it can be very expensive to live near the ocean. But it may come as a surprise to American taxpayers that they are on the hook for at least $527 billion of vulnerable assets in the nation’s coastal flood plains. Those homes and businesses are insured by the federal government’s National Flood Insurance Program.

You read that right: $527 billion, which is just a portion of the program’s overall liability of $1.25 trillion, second only to Social Security in the liabilities on the government’s ledgers last year, according to government data.

The flood insurance program was created by Congress in 1968 to fill a void: because of the risk, few carriers provided flood insurance. Now, private insurers offer flood insurance in a partnership with the government — but taxpayers shoulder all the risk. It has turned out to be a bad bet. The program is $18 billion in debt, a sum the government acknowledges probably will never be paid back by premiums, and it is likely to need a new multibillion-dollar infusion to pay claims from Hurricane Sandy. It is long past time for the government to stop subsidizing home and business owners who live and build in dangerous flood zones.

http://www.nytimes.com/2012/11/29/opinion/end-federal-flood-insurance.html?_r=0

[bluedigger]

3. But the private sector is always the superior solution.

I wonder what Rand Paul thinks of NFIP? Oh wait, what am I saying?

Fuck Rand Paul.

[TexasTowelie]

4. Yes, you're right

on both points!

[blue neen]

5. Many homeowners are being affected by this and don't even know it.

We just found out that our neighborhood was put into Zone A. There is a creek behind the homes, but no one has ever been flooded.

What gives?