Flood insurance policyholders and the legislators who represent them met Tuesday to urge Congress to pass a bill delaying steep rate hikes set to roll out in 2014 by at least four years. However, one House member wasn’t quite ready to believe the assertions of unaffordable rate increases.
Rep. Randy Neugebauer, chairman for the House Subcommittee on Housing and Insurance, suggested reports of premium increases of 300, 500 and even 1000% were “a lot of rumors.”
“What we’re trying to do is separate fact from fiction here,” Neugebauer told subcommittee members and witnesses. “And we’re hearing a lot of rumors. And some of those rumors…it turns out are not as represented.”
Neugebauer emphasized that for people who have subsidized flood insurance rates, the new, higher rates won’t be introduced until flood maps are completed—something not believed to take place until the end of next year.
As it is, he added, such steep rate hikes are needed to support the flagging National Flood Insurance Program.
“We do know that there are some people out there who are going to experience higher premiums,” Neugebauer said. “But, you know, that was the purpose.”
Meanwhile, Rep. Lynn Westmoreland questioned whether delaying the increases would be “fair” to American taxpayers not living in flood zones.
“The fundamental question posed by the flood insurance reform bill is one of fairness. Is it fair for everyone to subsidize the insurance of a few?” Westmoreland said. “The answer is simple. Taxpayers should not continue to subsidize the flood insurance of those who live in flood-prone areas. It’s not fair.”
Unless efforts to delay rate hikes are passed, an estimated 1.1mn home and business owners will see their premiums increase.
Michael Hecht, CEO of Greater New Orleans, Inc. and witness at the subcommittee hearing, told Insurance Business such widespread increases under the original legislation would “hurt the very businesses and people it was meant to protect.”