U.S. House releases its own flood insurance bill

Posted by Julian Yates on Tuesday, February 25th, 2014 at 3:06pm.

WASHINGTON – Feb. 25, 2014 – Florida Gov. Rick Scott pressed for help in high places on flood insurance in a meeting with President Barack Obama on Monday, but the issue may be decided in the GOP-controlled U.S. House.

The issue has split some Republicans in coastal states like Florida from GOP hard-liners who say some folks need to pay significantly more to help the National Flood Insurance Program (NFIP) get out of $24 billion in debt and discourage building in flood-prone areas.

Congressional Democrats said there is no deal yet but one lawmaker said conversations with GOP leaders have been “productive.”

A new House version of a bill to address the problem could be considered as early as this week. It eliminates, not just delays, certain triggers for a huge, immediate jump in premiums, such as the sale of a home, a lapse in coverage or the remapping of flood zones.

It keeps in place premium increases up to 25 percent a year for second homes, businesses and multiple-loss properties but scales back to 15 percent a cap on annual increases for primary homes not already paying rates considered adequate for the risk.

About four out of five of the nation’s 5.6 million NFIP policyholders pay full rates now, but much of the conflict is over the 20 percent losing subsidized rates including more than 268,000 in Florida and nearly 5,000 in Palm Beach County. Florida has nearly two out of every five flood policies in the country.

Breathtaking increases under a 2012 overhaul passed by Congress can raise annual premiums up to 10 times overnight, spurring real estate agents, business groups and others to say they jeopardize property sales and harm local economies. Rep. Lois Frankel, D-West Palm Beach, cited a South Florida couple in a “modest” home paying $2,400 but facing what she called an unaffordable increase to $12,000.

U.S. Rep. Maxine Waters, D-Calif., said she still had “significant concerns that the measure will not provide the necessary relief to those facing skyrocketing flood insurance premiums.” If it falls short, Waters said she will continue to press for consideration of a bill to delay big increases four years while an affordability study is conducted. That measure passed the Senate 67-32 and has 235 House co-sponsors, supporters say.

Groups opposing a blunting of premium increases accused the House of caving in on a politically sensitive topic.

“This bill represents a fundamental betrayal of the free-market principles and fiscal responsibility the House leadership claims to embrace,” said R.J. Lehmann, a senior fellow at the Washington, D.C. public-policy research group R Street Institute. “Less than two years after passing landmark reforms to fix the NFIP, which remains $25 billion in debt to American taxpayers, lawmakers appear poised to gut just about all of those reforms, all to score cheap political points.”

Scott, who met with Obama Monday as part of a gathering of governors in Washington, called on the president to do what he could to hold down premiums, raising it among other topics including Medicare spending and possible sanctions against Venezuela. He also talked to House Speaker John Boehner about flood insurance this month, noting Florida pays more than four times in flood insurance premiums what it collects in claims from the federal program.

“There’s a lot of talk in Washington,” Scott said on a busy D.C. street corner. “There’s not enough action.”

During a meeting Monday of President Barack Obama and U.S. governors, Gov. Rick Scott said that he pressed the president to halt sharp increases in flood insurance affecting Floridians, take sanctions against Venezuela for human rights abuses and to stop cuts in Medicare that he said are causing doctors to leave.

The White House has referred questions about flood insurance to the Federal Emergency Management Agency. FEMA Administrator Craig Fugate recently told Congress there is a lack of flexibility for administrative delays or changes within the Biggert-Waters overhaul approved by Congress in 2012.

Copyright © 2014 The Palm Beach Post (West Palm Beach, Fla.), Charles Elmore. Distributed by MCT Information Services; Laura Green, Palm Beach Post.

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Sarasota Area Real Estate Specialist

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