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Press of Atlantic City - Flood Insurance Changes / A Responsible Fix


Location: Atlantic City, NJ

By Frank LoBiondo

We, and many others, have long said that the federal government should not be subsidizing homes in flood zones.

The National Flood Insurance Program, which was once self-sustaining, is now $24 million in debt thanks mostly to Hurricane Katrina and Superstorm Sandy. Without a solvent federal flood-insurance program, we argued, there would be no tourism economy in New Jersey. Therefore, getting the program on a sound financial footing was in the best interests of coastal residents - even if it meant paying higher premiums.

And so, we called the draconian premium increases in the Biggert-Waters Flood Insurance Reform Act of 2012 bitter medicine but necessary medicine.

But last week, thanks to an unusual bipartisan coalition of lawmakers from coastal areas and other flood-prone regions, Congress scaled back the coming premium increases. An earlier version of the bill, which had passed the Senate, would have - unwisely - gutted the Biggert-Waters act. The measure that eventually passed both houses was far more sensible, and the White House has said President Barack Obama will sign it.

Premiums for second homes in flood zones and for homes that have flooded repeatedly will still increase up to 25 percent a year until they reach actuarial levels. That was a key component of the Bigger-Waters act, and lawmakers were wise to retain it.

But for others, premiums will increase from 5 percent to 18 percent a year, rather than 25 percent. Owners of homes with subsidized premiums will now be able to pass on those low-cost policies to new buyers - an especially critical change. And people who bought homes after Biggert-Waters was enacted in 2012 will have their initial premiums rolled back.

As with any good compromise, people on both sides are still unhappy. Have no doubt, flood insurance premiums will still increase - and should increase - here at the shore, but they will do so more slowly.

Fiscal conservatives note, correctly, that the flood-insurance program will remain dangerously insolvent for longer thanks to the rollback. Environmentalists note, correctly, that the flooding risk along the coast is rising, and the intent of the original law - to discourage rather than subsidize building in flood zones - was the proper approach.

But overall, this is a sensible and responsible fix that retains the goals of the Biggert-Waters act but phases them in more slowly.

U.S. Rep. Frank LoBiondo, R-2nd, and New Jersey Democratic U.S. Sens. Robert Menendez and Cory Booker were among the lawmakers from both parties who worked together to get the changes enacted. They all deserve praise for addressing the problem - and addressing it carefully and responsibly.

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