Delay in flood insurance hikes passes the Senate
By Joe Moskowitz
The United States Senate passed a bill last week that would roll back scheduled massive increases in flood insurance premiums and delay some hikes for up to four years.
It was a lopsided bipartisan 67-32 vote, but because of politics and financial realities, the insurance industry is not advising property owners to start counting their savings right away.
Two years ago, both houses of Congress agreed to increases flood insurance premiums in flood-prone areas because the Federal Emergency Management Administration (FEMA) was broke.
Worse than broke, FEMA is now $24 billion in debt. The increased premiums started to be phased in during the autumn of 2013.
But even though the Senate approved the freeze and rollbacks, the bill must still be approved by the House of Representatives.
Still too early
Pete Sluiter of Margaretville’s Sluiter Agency Inc. says insurance industry e-mails tell him that any discussion of price reductions is premature, and he said he doubts that it is going to happen. And no matter what, the Senate vote did not change anything in current policies.
The big problem is that the bill approving the premium rollbacks may not make it through the House of Representatives. In fact, it may not even come to a vote.
Representative Jeb Hensarling, a Texas Republican and Chairman of the House Financial Services Committee, said he is against it. He said he favors a free market approach to paying for flood insurance. Historically taxpayers and other policyholders have subsidized property owners in high-risk flood areas.
Some of the bill’s supporters say flood insurance premium hikes could damage the real estate market in flood-prone areas. But Hensarling, and others who oppose the flood insurance rollbacks and delays, claim the Senate measure won’t solve anything because FEMA is still broke.