Protecting People, Property and Our Way of Life

Get ready for flood insurance reform – again

April 7, 2017

By:  Garrett Ohlmeyer,


U.S. Rep. Steve Scalise flew with a colleague over coastal Louisiana last month to show him how important affordable flood insurance and levee protection are to residents.

“When we flew over, you’re looking at almost pure water, barely even marsh, and then all of a sudden you see the vegetation and then the levees,” said Scalise, R-Metairie, whose southeast Louisiana district includes southern Terrebonne and Lafourche parishes. “And you see a very vibrant, well-protected community because the flood protection that was done has actually worked at keeping water out of those communities.”

Scalise’s guest was Sean Duffy, a Wisconsin Republican and chairman of a House subcommittee on housing and insurance who will lead discussions and help write the bill for this year’s renewal of the National Flood Insurance Program, set to expire Sept. 30.

Congress is also expected to enact reforms to the program, which critics say encourages people to live in harm’s way at taxpayers’ expense. The problem Congress has tried to solve for years is summarized in a U.S. Government Accountability Office report issued in February.

“The program,” the report says, “offers rates that do not fully reflect the risk of flooding.”

The imbalance has helped put the program, administered by FEMA, $24.6 billion in debt.

The program is the sole source of flood insurance for more than 5 million homes and businesses across the U.S. As of Jan. 31, it covered about 16,000 homes in Terrebonne and 12,000 in Lafourche with a combined value of roughly $7 billion.

South Louisiana residents remember the crisis that resulted the last time Congress tried to reform the program. Lawmakers’ solution was called the Biggert-Waters Act of 2012. One of its main goals was to bring insurance costs more in line with homes’ actual flood risk. As its provisions were enacted, some south Louisiana homeowners saw flood insurance costs rise from a few hundred dollars a year to $20,000 or more. The biggest impact occurred in parishes that adopted FEMA’s updated land elevation maps, which reflected increased flood risk for many homes and businesses.

The skyrocketing insurance costs threatened to render homes worthless, wrecking families, lives and communities, officials and affected residents said. Louisiana lawmakers, who claimed to realize the dramatic effects after the law had been enacted, with the help of their votes, succeeded in passing temporary fixes in 2014 that averted most of the major cost increases.

Interests that include the insurance and real-estate industries, taxpayer advocacy groups, states and communities are lobbying for a variety of reforms., a diverse coalition that includes environmental, real-estate, insurance, housing, consumer and taxpayer interests, has laid out a reform proposal that asks Congress to:

  • Update and improve mapping techniques and risk analysis to ensure property owners and communities better understand real risk.
  • Allow consumers choice in flood insurance policies by ensuring private insurers have access to the flood insurance market.
  • Give policyholders access to better rates and higher coverage limits.
  • Continue to shift to a system of risk-based flood insurance rates while providing assistance for lower-income policyholders.
  • Help reduce risk by subsidizing flood-proofing, home elevation and other efforts.
  • Help communities reduce risk through environmental programs such as bolstering wetlands that buffer inland communities from storms.

“With the NFIP set to expire in September, the SmarterSafer proposal is a road map for how Congress can save the program while better protecting those in harm’s way, taxpayers and the environment,” the group says. “Putting these reforms in place will give American homeowners greater choice in flood insurance coverage while reducing the damage from future storms.”

The National Association of Realtors says it is working to ensure Congress renews the program before it expires. Congress has patched the program with short-term renewals more than a dozen times since 2008 and let it lapse for about a month in 2010.

“When that lifeline is cut off, the NFIP can’t issue new policies or renew existing residential or commercial policies that expire,” National Association of Realtors President William E. Brown said in a news release. ”That means current home and business owners may find their most important asset unprotected.”

When Congress let the program expire in 2010, more than 1,300 home sales across the country were disrupted every day as a result, Brown said. Flood insurance is required for a mortgage in flood-prone areas, but without access to the federal program, buyers couldn’t get a mortgage or vital protection from the No. 1 cause of loss of property and life.

“The NFIP isn’t perfect, and reforms are needed,” Brown said. “We will continue working closely with everyone involved to achieve those reforms.”

Scalise said it’s important to not only make sure homeowners have affordable flood insurance but that if they sell their home, the buyer will be able to afford a policy as well. Scalise said he will also work to ensure that any price increases are phased in over time instead of hitting homeowners all at once.

“When you have a requirement that people in certain areas have to have flood insurance to be able to hold a mortgage on their home, then you have to have a program that works, and right now NFIP is the only game in town,” Scalise said.

Dwayne Bourgeois, executive director of the North Lafourche Levee District, is a member of the Louisiana Flood Risk Coalition, composed of levee districts that are pushing for reform. He said the coalition has been talking with Louisiana’s congressional delegation, and all of its members understand the need for making insurance affordable for Louisiana residents. What’s more important, Bourgeois said, is reaching members of Congress in other parts of the country.

“We’re looking for more folks to support this effort by reaching out to, not so much our delegation, but anybody else they may have a connection to,” Bourgeois said. “Because our delegation gets it.”