(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.”
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.”
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 SmarterSafer.org, 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.
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