House votes to re­new flood in­sur­ance pro­gram

Chattanooga Times Free Press - - NATION - BY KEVIN FREK­ING

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.

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