Oh, good: Congress moving on a reprieve for already-subsidized federal flood insurance

posted at 5:21 pm on July 17, 2013 by Erika Johnsen

Just what the national debt needs: Another “temporary” reprieve on an expensive federal program that actively promotes adverse incentives and undercuts a service available in the free market, all at the expense of the faceless taxpayer. Perfect.

The AP reports that hundreds of thousands of homeowners were, until yesterday, looking at higher premiums on their federally subsidized flood insurance after Congress passed (the minimum of) much-needed reforms to the National Flood Insurance Program. On Tuesday, however, the possibility of a one-year reprieve on the higher premiums started to make its way through the Senate:

The temporary relief would go to homeowners in low-lying areas of Louisiana, Florida and other states where new government surveys could produce flood insurance premium in­creases so big that the homeowners might be no longer able to afford their homes.

At issue are homeowners whose flood insurance bills have historically been “grandfathered” at lower rates since they followed the rules in place at the time they bought or built their home. Under last year’s bipartisan overhaul, many of these homeowners face higher premiums when new flood maps are issued.

The Senate Appropriations Committee approved the measure as part of a $39 billion spending bill funding the Department of Homeland Security. The legislation has already passed the House as part of its version of the spending bill.

The overhaul of the flood insurance program passed last year with sweeping bipartisan support. The program has required more than $24 billion in bailouts since being established in 1968, with billions of dollars in additional costs from Hurricane Sandy still being tallied. Most of the losses came because of subsidized insurance rates and losses from repeat claims on homes and businesses flooded every few years.

Why is it that whenever Congress seems to finally summon the gumption to allow the tiniest bit of government spending to fall away, it seems like they almost immediately move to temper it? Starting this October, insurance rates on homes and businesses in flood zones that have been repeatedly and severely flooded are going to start going up by 25 percent a year until they reflected the “true risk” of the area, while subsidized rates would begin to lapse when homes were sold or flooded repeatedly. The reforms were passed on a bipartisan basis, and reflected the simple reality that, if you cannot afford the risk of rebuilding or repairing your home that comes with living in a flood zone, maybe… don’t live in a flood zone. The costs of maintaining waterfront property aren’t always cheap, for more than one reason — and they shouldn’t be made cheap by the largesse of the federal government.

Older homes under older codes were also supposed to start seeing rate increases starting late next year, but now Congress might be putting a delay on that category — and perhaps another one-year delay isn’t a big deal, except what’s to stop them from doing the exact same thing next year? This hardly qualifies as a service that necessitates the involvement of the federal government, and it is one that we can ill afford.


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could produce flood insurance premium in­creases so big that the homeowners might be no longer able to afford their homes.

You mean like the homes built under sea level?

The radical Left has produced chaos in every corner.

faraway on July 17, 2013 at 5:31 PM

Was that a bunny rabbit I saw floating by?

Electrongod on July 17, 2013 at 5:32 PM

Was that a bunny rabbit I saw floating by?

Electrongod on July 17, 2013 at 5:32 PM

No, it was ALT in her bunny suit.

RickB on July 17, 2013 at 5:34 PM

One thing that always surprises me about the Tea Party is that it never picks a fight that it can win by reaching across the aisle. Does anyone actually believe in the Department of Homeland Security? Why are flood insurance and FEMA buried within its monstrous grasp in the first place?

http://www.businessweek.com/articles/2013-07-15/the-case-for-abolishing-the-dhs#r=rss

bayam on July 17, 2013 at 5:36 PM

bayam the Tea Party doesn’t pick fights. It rails against wasteful spending. There are too many battlefronts in that war to say we are picking anything. Go away.

DanMan on July 17, 2013 at 5:41 PM

I don’t know how this is related, but here in California they came out with flood maps and told everyone in the areas they would need flood insurance (about 1300 dollars a year). The problem was that a large percentage of these areas had never seen a flood. Our back yard was declared in the flood zone and one small corner of our neighbors front yard was. So we were both told to buy the insurance. However, their back yard is lower than our back yard and it was not in the zone. People who had bought these houses long before this was an issue were suddenly faced with these bills. Many of these are retirees on fixed incomes. I think by expanding these flood maps they are trying to subsidize areas that actually do flood on a regular basis.

Rose on July 17, 2013 at 5:58 PM

This is why I despair. Even if the GOP wins big in 2016, they will never have the guts to cut one payment or one bailout to one person or group.

Obama knows this and that’s why he’s setting up entitlements and bureaucracies in a hurry. The permanent leftist shadow government.

PattyJ on July 17, 2013 at 5:59 PM

In my city, there is a brook that flows through the center of a populated area. It used to flood fairly frequently in the Spring. There was a requirement to have flood insurance on any homes in that area. In 1995 the city came through with a renovation project and dug the brook down deeper, put in high banks and put two huge drainage pipes downstream of the area that used to flood where there was a narrowing of the brook (which caused it to back up and flood). After that, there were no more flooding events. In 2003, the city rezoned that old flood plain out and as a result, flood insurance was no longer required for homeowners in that now obsolete zone.

In 2006, as a direct result of Hurricane Katrina, FEMA started going around the country rezoning old, defunct flood plains back INTO flood plain areas. So, flood insurance was again required on homes in that “flood zone” in my city. I’m sure millions of people were dragged back into old flood plains, all over the country.

Even though it has not flooded again since the modification to the brook in 1995.

Furthermore, it is a BROOK….the most damage that ever happened, was a few flooded basements, we aren’t talking about homes floating away or nonsense like what happens almost every year in the mid-west. We’ve had hurricanes, blizzards, tropical storms, you name it, and no flooding events.

It is just another TAX that got put onto homeowners all over the country, because the people in NOLA believe its everyone else’s problem they want to live 10′ under sea level, surrounded on all sides by water.

KMC1 on July 17, 2013 at 6:02 PM

I don’t know how this is related, but here in California they came out with flood maps and told everyone in the areas they would need flood insurance (about 1300 dollars a year). The problem was that a large percentage of these areas had never seen a flood. Our back yard was declared in the flood zone and one small corner of our neighbors front yard was. So we were both told to buy the insurance. However, their back yard is lower than our back yard and it was not in the zone. People who had bought these houses long before this was an issue were suddenly faced with these bills. Many of these are retirees on fixed incomes. I think by expanding these flood maps they are trying to subsidize areas that actually do flood on a regular basis.

Rose on July 17, 2013 at 5:58 PM

Here’s what I’m talking about.

KMC1 on July 17, 2013 at 6:04 PM

Federally subsidized flood insurance is a scam. My house is almost 60 years old and has never flooded. The maps for my area were updated 5 years ago and they raised the levels by about 14″. Our house surveyed out of the raised level by inches. Didn’t matter they said, the map shows my property is in the flood plain. I’d had to file a CLOMR to get relief. For a house.

The flood insurance doesn’t cover out buildings or the yard anyway. I cancelled it since my house is paid for but it still pi$$es me off that they can just make it up like they do.

DanMan on July 17, 2013 at 6:08 PM

they are expanding the flood maps across the country to pay for these people that live on the coasts and are then ‘shocked’ when they get flooded. the elderly people in my neighborhood are being forced out, typical big govt…

burserker on July 17, 2013 at 6:11 PM

KMC1 on July 17, 2013 at 6:02 PM

hmmm the timing does seem to be suspicious. Our maps were updated in 2007, yours in 2006, Katrina in 2005

DanMan on July 17, 2013 at 6:14 PM

Lets encourage people to build on floodplains!

And then watch as the program for it has its price go through the roof… while the government goes underwater for helping all those who should KNOW BETTER. Including those who enacted the law.

ajacksonian on July 17, 2013 at 6:19 PM

hmmm the timing does seem to be suspicious. Our maps were updated in 2007, yours in 2006, Katrina in 2005

[DanMan on July 17, 2013 at 6:14 PM]

Not really suspicious. These things run in cycles, like bridge repair. Municipalities, or what ever, fall behind for one reason or another and then a big story catches the attention of Congress and they throw money at it. Then the agency uses the money to try and catch up on the things that are backlogged.

Dusty on July 17, 2013 at 6:31 PM

The temporary relief would go to homeowners in low-lying areas of Louisiana, Florida and other states where new government surveys could produce flood insurance premium in­creases so big that the homeowners might be no longer able to afford their homes.

I went through no fewer than three “hundred year” storms while living in New Orleans. There is no secret about what areas are more flood prone no matter what the surveys dictate. I have no sympathy for those who buy homes in flood prone areas and rely on subsidized insurance to ensure they can rebuild in a place that shouldn’t be built on in the first place.

Happy Nomad on July 17, 2013 at 6:32 PM

Flood insurance is a cruel joke. My family had a house in Breezy Point. We had flood insurance on it until the mid 80s. In all the previous storms, when we had damage, the flood insurance wouldn’t pay out, saying it was storm or wind damage, or regular home owner’s insurance claim. So my granddad dropped it, opting for storm and home-owners instead. Now when we rebuild, when they finally nail down the building codes, we’re going to have to have it again. And its not 1300 a year. Its alot more than that.
Anyway, people who lost their homes, and had flood insurance, the flood insurance is only paying for the first 5 feet of the house, because that’s how high the water came. It doesn’t matter that the city came and condemned and demolished the house as unlivable. And home owners won’t pay, because the damage is “flood”. The only people for sure being made whole are the ones whose houses burned. Oh and the lawyers, because the residents of Breezy Point are suing the insurance companies.

Iblis on July 17, 2013 at 6:40 PM

Lets encourage people to build on floodplains!

[ajacksonian on July 17, 2013 at 6:19 PM]

People can’t build in floodplains, if by floodplain you mean below the elevation of the water determined at your property of a 100 year flood assessment. If you wanted to build there, your structure would need to be a minimum of 1 foot, IIRC, above that elevation. Further, you cannot fill in a flood plain, so if you want to build you either need to build it on stilts or, if you propose to fill at your structure footprint, you’d need to provide an equal volume of cut either within the flood plain or in an area outside the flood plain which would than be part of the flood plain so as to compensate for your filling.

The problem with changing floodplains, aside from lack of maintenance of municipal storm water facilities, is more a problem of people upstream adding stormwater, by increasing property runoff volumes or making improvements to flood zones upstream which change travel times and volumes with no regard to the affect it will have to people down stream.

Dusty on July 17, 2013 at 6:55 PM

i have to pay flood insurance on my property b/c a corner of my lot is in a so called ‘floodplain’. the house has been here since 85 and has never flooded, 2 years ago a hurricane parked itself over the neighborhood, and still no flooding. expanding the flood maps is nothing but a big govt big money grab. i’m trying to get my neighbors to consider a lawsuit…

burserker on July 17, 2013 at 7:10 PM

Rose’s situation as outline above is similar to the one my two retired parents are facing.

Bureaucracy causing a HUGE increase in insurance premiums on a home that has not flooded. The whole neighborhood – working class – would have gotten slammed and made the homes unaffordable. Because the area is near a beach it would then be easy pickens for rich liberals (the area is swarming with them).

Erika – your story oversimplifies a complex problem.

scarchin on July 17, 2013 at 9:45 PM

they are expanding the flood maps across the country to pay for these people that live on the coasts and are then ‘shocked’ when they get flooded. the elderly people in my neighborhood are being forced out, typical big govt…

burserker (above) gets the story correct

scarchin on July 17, 2013 at 9:47 PM

I got a notice a few years ago that my house was suddenly in a flood plan and that I would have to get flood insurance. After spending about $1700 FEMA suddenly reversed themselves and realized I did not need flood insurance. If anything I am even more disgusted with big government than Erika.

burt on July 17, 2013 at 9:56 PM

Erika – your story oversimplifies a complex problem.

scarchin on July 17, 2013 at 9:45 PM

Erika, you got it right. The people who have been getting subsidized for years have been getting a free ride and it should stop.

burt on July 17, 2013 at 10:02 PM

burt –
Did you read my post? Or the others? This isn’t about people getting a free ride. It’s about taxpayers getting screwed by bureaucracy.
Put your reading glasses on.

scarchin on July 17, 2013 at 10:06 PM

I’m not “upset” with Erika.

The problem is this part of her story:

“…if you cannot afford the risk of rebuilding or repairing your home that comes with living in a flood zone, maybe… don’t live in a flood zone.”

What is a “flodd zone”? Apparently it’s whatever the government says it is in order to raise revenue. People got screwed unjustly by recent “re-evaluations.”
These are people who’ve lived in these homes without incident for decades.

From what I gather from the WaPo story is that problems have been identified and they want to put a one-year hold on the program so they can straighten things out.
What’s the problem?

To accuse these people of getting a “free ride” is intellectually careless BS.

scarchin on July 17, 2013 at 10:13 PM

“flood zone”

scarchin on July 17, 2013 at 10:14 PM

an expensive federal program that actively promotes adverse incentives and undercuts a service available in the free market, all at the expense of the faceless taxpayer

Add crop insurance to that.
That is one of the most disgusting get rich games a farmer can play these days.
The stories I have from my neighbor farmers on this would pi$$ you off to no end.

Badger40 on July 17, 2013 at 10:21 PM

scarchin on July 17, 2013 at 10:06 PM

People who choose to live in real flood zones whether near rivers or oceans are taking a risk. They should accept that risk even if they are your parents. Decades ago I chose not to buy near a beach because of the risk and because I don’t believe the government should be taking the risk.

burt on July 17, 2013 at 10:36 PM

NOLA: The Definition of Insanity

blammm on July 18, 2013 at 8:54 AM

Our Constitution does not give the government permission to insure anything except our freedom. It is just stupid to build houses inside levees and think nothing bad will happen. Why in HELL does the government give these ignorant people money to rebuild in the first place much less to keep on doing the same thing over and over again? Levees were built to keep water within boundaries and this should apply to housing. I have seen this happen about three times in my part of the country. People lost their houses and personal property because of high water that was within the levee. Just because these people built their homes where the water was expected to flood during high water does not make the government responsible for their stupidity. When the private sector insurance companies have policies in place for high risk areas there is a reason for it. If want to build in risky places then pay the insurance companies the higher prices and leave our taxpayers out of the equation.

harvey1 on July 18, 2013 at 11:10 AM