Before the federal government closed its doors Monday night, momentum was building towards an agreement on delaying the massive flood premium hikes scheduled to roll out this week. Now advocates are in a waiting period, but that hasn’t dampened administrative enthusiasm or policyholder desperation.
“The government may be in the process of shutting down, but my colleagues and I have our eyes on finding a solution for the 5m Americans…who have flood insurance policies that are facing significant rate increases today,” said Sen. Mary Landrieu of Louisiana during a news conference Tuesday. “Our flood insurance program is not functioning the way it should and is putting a great number of people at risk.”
Landrieu and her colleagues introduced a bill last week to delay implementation of the Biggert-Waters Flood Insurance Act, but missed the opportunity to enact changes before the new fiscal year began Tuesday. That means that some home and business owners in Louisiana and New England will be looking at increases in flood insurance premiums of up to 3,000%.
For those facing this financial burden, legislative optimism isn’t quite enough. For Michael Hecht, president of the non-profit economic developer GNO, Inc. in New Orleans, the real concern is how the interruption in administrative negotiations will affect the local economy.
“We will get to a point where this will be solved. The real challenge is what will happen in the interim,” Hecht said. “Real estate markets will slow down. People won’t be able to buy or sell businesses without knowing what the costs will be.”
According to a fact sheet from the National Flood Insurance Program (NFIP), property sitting four feet below a 100-year flood plain will now cost nearly 700% more to insure. And unless Congress reconvenes and acts on Biggert-Waters, those staggering figures will remain unchanged.
“We have to go forward with the law the way it is,” said Dolores Glass, a spokesperson for Wright National Flood Insurance, which contracts with the National Flood Insurance Program (NFIP).
When Congress does return to work, advocates for flood reform delays will be joined by Rep. Maxine Waters, who co-sponsored the controversial legislation.
“I am outraged by the increased costs of flood insurance premiums that have resulted from the Biggert-Waters Act,” said Waters in a Monday statement. “I certainly did not intend for these types of outrageous premiums to occur for any homeowner.”