WASHINGTON – The Federal Emergency Management Agency says a recently enacted budget provision means that it won’t begin to implement higher rates for some flood insurance recipients until at least Oct., 2015, and perhaps as late as June, 2016.
The agency responded Thursday to a provision added to a recently enacted spending bill that bars the agency from spending funds for the remainder of the 2014 fiscal year to implement a provision of the 2012 Biggert-Waters Act. That provision required the agency to phase in higher premiums over five years for properties that had been grandfathered into previous FEMA risk classifications.
Biggert-Waters is ending the grandfather clause by requiring actuarial rates — phased in over five years — for properties remapped into higher risk classifications. Some homeowners have been told to expect dramatic increases in premiums — double, triple, 10 times, or even higher.
The phase in of higher rates, which were supposed to begin on Oct. 1, 2014, now won’t start at least for 12-18 months later, FEMA said in a memo Thursday about the impact of the congressional rider.
The rider, added by Rep. Bill Cassidy, R-Baton Rouge and backed by the entire Louisiana delegation, barred FEMA from using its funding “to implement, carry out, administer, or enforce Section 100207 of the Biggert-Waters Flood Insurance Modernization and Reform Act of 2012” for the rest of the fiscal year, which ends Oct. 1.
FEMA said in the memo that because it can’t work to implement the changes under that section of Biggert-Waters, delay is inevitable.
But the rider doesn’t impact another costly provision of Biggert-Waters, which requires immediate increases in premiums to actuarial rates once a home changes ownership, or a flood insurance policy lapses. That has made some homes unsellable, according to Louisiana congressional members.
Cassidy said the reprieve in higher rates for people remapped into high risker classifications is “great news for many working families in Louisiana.”
Both he and Sen. Mary Landrieu, D-La, who are running against each other in the fall Senate race, said more action is needed.
The Senate last week passed legislation by a large margin – 67-32 — that would have delayed most of the increases resulting from Biggert-Waters, including those immediate hikes once a home is sold, for four years.
House Democrats tried twice this week to use a procedural maneuver to get a vote on the Senate legislation, though that failed. Cassidy was one of two Republicans to break from his party and vote in favor of the Democratic maneuver. Some House Republicans say it would be a mistake for such a long delay in premium increases designed to make the debt-ridden flood insurance program solvent.
Landrieu said the Louisiana delegation is “united in our efforts to prevent the catastrophic rate increase that millions of hard-working, middle class families are facing.”
“We worked together last year to pass a short-term delay of rate increases for grandfathered properties,” Landrieu said. “I was glad to author it as part of the Senate Homeland Security Appropriations bill. But, our ultimate goal must be to pass the coalition-backed bill that overwhelmingly passed the Senate last week with bipartisan support.”
According to Landrieu’s office, the best estimate on the number of grandfathered properties that will be affected by the delay announced by FEMA Thursday is between 33,000 and 230,000. Louisiana has 485,000 flood insurance policyholders.