House votes to renew flood insurance program
WASHINGTON — The House on Tuesday backed legislation that will increase flood insurance premiums for many property owners to help firm up a program under stress from ever-more frequent and powerful storms.
The bill’s passage was secured when sponsors made a variety of changes to accommodate lawmakers determined to protect constituents from even steeper rate hikes or from being booted out of the program altogether. The vote was 237-189.
Just last month, the insurance program needed a $16 billion bailout to continue paying claims from people hard hit by Hurricane Harvey. Critics said that demonstrated the need for a major overhaul as Congress considered a long-term extension.
The program is the only flood insurance available to most Americans. Homeowners who live in areas that have a 1 percent chance of being inundated by flood waters in any given year must purchase flood insurance as a condition of having a federally backed mortgage.
But the premiums paid by policyholders are not keeping up with the expense of flood claims. Massive storms such as Hurricane Katrina and Superstorm Sandy generated huge expenses, and with climate change, the scope of flooding seems only to get worse.
The House Financial Services Committee passed legislation in June reauthorizing the National Flood Insurance Program for five years. Some of the changes sought had strong bipartisan support, such as clarifying that flood insurance policies written by private carriers satisfy the government’s requirements when it comes to obtaining a federally backed mortgage.
Yet, other aspects of the bill would have increased costs beyond what some Republicans could accept.
Behind the scenes, Texas Rep. Jeb Hensarling negotiated with Majority Whip Steve Scalise, R-La., on a compromise. The final legislation removed a provision that would have prohibited the program from insuring newly constructed structures after 2021 as well as a provision prohibiting insurance for houses with replacement values exceeding $1 million.
The lawmakers also agreed the program would account for frequently flooded properties by increasing premium rates based on future flood claims rather than on past flood claims.