(Washington, D.C.) – U.S. Sens. David Vitter (R-La.) and Thad Cochran (R-Miss.) today introduced legislation to avoid potentially drastic flood insurance rate increases. The Responsible Implementation of Flood Insurance Reform Act would delay the period of phasing in rates, give flexibility for state and local governments to assist with subsidizing flood insurance, and reform the Federal Emergency Management Agency (FEMA) flood mapping procedure.
“Flood insurance is obviously vital for business and families in Louisiana and this is a big, big deal for folks,” Vitter said. “We need to make sure that people who have been following the rules aren’t priced out of their homes because their flood insurance rates increase so dramatically. It’s a legitimate fear, and our bill would work to make sure that doesn’t happen.”
“Families, businesses and communities in Mississippi and around the nation need assurance that new flood insurance premiums will not be cost prohibitive. Our legislation seeks to ensure that any higher flood insurance costs, on top of other insurance requirements, do not overwhelm family budgets or economic growth in areas that rely on the National Flood Insurance Program,” Cochran said.
New flood maps take years to develop and many South Louisiana communities have been playing by the rules, building homes and businesses to one set of requirements. Now many find themselves in the final stage of developing maps only to see a new set of rules. This gives them little time to plan for the changes in their flood insurance rates.
There has been confusion with FEMA’s Levee Analysis and Mapping Procedure (LAMP) policy and whether FEMA has taken into account all flood barriers and protection as new areas are mapped, especially in Louisiana. The confusion being caused in communities comes from FEMA predicting rates on incomplete maps and potentially faulty data.
This Responsible Implementation of Flood Insurance Reform Act will do the following:
• Ensure that communities that were developing new maps by the end of 2013 will be able to maintain the grandfathered rates that are subject to change in Section 207 of the Flood Insurance Reform Act of 2012 (PL.112-141);
• Allow a five-year phase in of actuarially sound rates for newly purchased homes;
• Authorize state and local governments flexibility to subsidize homeowners flood insurance properties if they so choose;
• Enable 25% of mitigation funding in any given year to go directly to homeowners to support pre-disaster mitigation improvements;
• Prohibit FEMA from considering the level of federal funding or participation in the flood control structure project when determining the level of protection that the project provides the community; and
• Require that FEMA include all protections provided by any levee, dam or other flood control structure regardless of accreditation status before the flood insurance rate map or update may be finalized.
Congress allowed the NFIP to lapse four times in recent years for a total of 53 days during which individuals could not acquire flood insurance coverage. During those lapses, real estate closings were postponed or canceled. The National Association of Realtors estimated that failing to reauthorize the NFIP could result in losing almost 40,000 closings per month.