House Wants to Fix Debt-Ridden, Wasteful Flood Insurance Program

(Quin Hillyer, Liberty Headlines) According to the New York Times, “a house in Spring, Texas, has been repaired 19 times, for a total of $912,732 — even though the property is worth only $42,024.”

Churches Sue FEMA for Hurricane Relief Funds

PHOTO: Becket

Such are the abuses which led to the national flood insurance program running more than $30 billion into debt, and which Congressional legislation is intended to reform.

The U.S. House of Representatives this week advanced significant free-market reform to the perpetually debt-ridden program.

By a 237-189 vote, the House passed the 21st Century Flood Reform Act, which Speaker Paul Ryan described as “a collection of seven bills that injects private market competition and pragmatic reforms to update this floundering program.”

PREVIOUSLY: Hurricane Harvey Could Bankrupt The Federal Flood Insurance Program

To quote from Ryan’s press release, “Among the many reforms the bill makes, it provides affordable coverage for policyholders by decreasing the annual cap on an individual’s annual rate increases and caps surcharges on low-risk properties. At the same time, it improves the financial soundness by gradually increasing rates for certain properties to meet actuarial risk. Perhaps most importantly, the legislation would help establish a private market for flood insurance, which will increase access, competition, and consumer choice. That means real money saved for real people.”

One key facet of the bill – one that made it controversial for certain coastal-state lawmakers still wanting bigger handouts for their constituents – was the part that finally allows increased rates for “actuarial risk,” which means for properties that are repeatedly flooded.

As the respected, largely apolitical Pew Charitable Trusts explained, “Historically representing just about 1 percent of policyholders but roughly 25 to 30 percent of the program’s claims, the number of these properties has been growing and may continue to increase as lower-risk property owners opt for private flood insurance.”

Furthermore, “The bill would also require property sellers and leasers to disclose flood history and risk, and for the first time would enable the federal government to deny coverage to the riskiest and costliest properties,” said Laura Lightbody, flood-prepared communities project director for Pew.

A group called, combining diverse interests ranging from environmentalists to taxpayers and insurers, said the reforms are good news: “Putting these reforms into place will help Americans reduce damage from future storms while ensuring that the federal program remains viable for years to come.”

The bill represented a compromise among interests that cut across usual ideological lines, partly based on geography of the individual House members. But even among those usually thought of as conservatives, some thought it was more important to salvage at least some form of the federal program and were willing to compromise while others insisted, variously, that the program either represents too much of a socialized, big-government model – or, contradictorily, one that, if government is to be involved at all, might as well remain generous despite the costs.

A key player who helped bridge the gap was generally conservative House Majority Whip Steve Scalise of flood-prone southern Louisiana, who bucked several fellow Louisianans by accepting some premium increases in order to help stabilize the overall program for “real certainty to policyholders.”

Particularly important for free-market conservatives was the part of the package called the Flood Insurance Market Parity and Modernization Act, sponsored by Republican Dennis Ross of Florida, which ensures greater access for private insurers rather than insisting that only government can do the job.

Rep. Seeks to Restore Mining After Obama's Last-Minute Land Grab

Tom Emmer/IMAGE: YouTube

Other solid conservative Republicans who voted for and praised the act were Reps. Morgan Griffith of Virginia and Tom Emmer of Minnesota. Griffith lauded its “compromise language to make the appeals process easier” for those unsure if their claims are covered, while Emmer said the new private options and other reforms will “prevent Congress from being forced to continue governing from crisis to crisis.”

Still, all south Floridians in the House voted against the bill, saying that it will leave some properties in their low-lying districts uninsured. (Their critics would say that if even this reformed program leaves the properties uninsurable either via the federal government or private insurers, perhaps that means they shouldn’t be built upon in the first place.)

The bill now moves to the Senate, where it faces uncertain prospects.

Click here for reuse options!
Copyright 2017 Liberty Headlines

  • mudguy1

    Thats all do is to want to fix thing but never ever really fix things,

  • Fred_K

    If they truly wanted to fix it, it would be fixed. Just like all the other stuff that is important.

  • rocky49

    They did fix the plan in Fort Atkinson,WI they said your in a flood plain NO MORE insurance. You want to stay there fix it on your own from now on!!

  • crazybarry

    Government has no business being in the insurance business. The reason that they are, is that no real insurance company would ever sell flood insurance IN KNOWN FLOOD ZONES!

    • slk5

      just like stossel said!!!

  • Kathryn Jordan

    I truly hope they they are able to fix the flood waste insurance problem. This and other stuff that our representatives and senators should be working on; it’s why we send these people to Congress in the first place. Maybe if both the state government and Congress can work together, the flood insurance waste would go down (I know, I know — that is ideal not reality only one can hope)

  • Maxine Albritton

    If I wanted to live in a flood zone , I could have thanks to the government Live on a lake, river, etc. in florida, which is apt to flood in high rain seasons or hurricanes. But I see the stupidity of that and live inland. High and dry. We have some land in flood zones but we did not build there