Moving to Repair Flood Insurance

The rules are brutal, unfair, and make no sense

    Following House passage earlier this month of a bill that would repeal some of the sharpest rate hikes in the federal flood insurance program, pressure is building in the Senate to rapidly approve the measure without amendment.

    The matter is of tremendous importance on eastern Long Island, where second-home owners and new buyers have had to deal with huge increases in annual premiums. This not only affects waterfront properties; residents, heirs, and would-be sellers in many of the town’s, and the country’s, low-lying areas must now deal with sudden, surprising, and in some cases, unbearable costs.

    A change of ownership even after a family member’s death or the re-mapping of risk areas now triggers rate hikes of as much as 100 percent in the first year, with more to come unless Congress acts. The rules are brutal, unfair, and make no sense.

    The changes came from the 2012 Biggert-Waters Flood Insurance Reform Act, which attempted to close a deficit in the program that only worsened after payouts for Hurricane Sandy. But the revision, which sought to end a taxpayer subsidy, came at too high a cost. The outcry was immediate as those impacted realized they were being asked to pay to cover gaps in the program as a whole.

     Representative Tim Bishop, whose district includes East Hampton, was among the sponsors of the House’s Flood Insurance Affordability Act (H.R. 3370), and said in a release that it would prevent rapid leaps in premiums. It seeks to balance the books through annual surcharges on everyone in the program, which covers 5.6 million properties. The surcharge would be $25 for owner-occupied residences and $250 for vacation houses and commercial sites. This is far more even-handed than penalizing the relatively few people every year whose houses change hands or whose property statuses are altered in revised flood maps.

    The Senate appears ready to quickly pass the House bill instead of seeking to reconcile it with its own, which was approved in January. Senator Charles E. Schumer, who has spoken out on behalf of Rockaway residents and others hurt by the new rules, is a strong backer of the reform effort.

    Beyond the question of fairness, the Biggert-Waters rules threaten to erode the flood program if too many property owners opt out. Insurance only works when there is a big enough pool to cover potential losses. Keeping as many people in the program and spreading the costs as widely as possible appears the only course toward solvency. Saving the program and helping homeowners is the right thing to do.