Congress All Talk-Little Action on Flood Insurance!
Thursday, March 27th, 2014
Baton Rouge, Louisiana
POLITICIANS GIVE FALSE HOPE ON FLOOD INSURANCE RATES!
Louisiana’s
congressional members of both parties were throwing cheers and high fives. They
had done it. They had put an end to the
proposed outrageous flood insurance rates.
“I’m very proud,” beamed democratic Senator
Mary Landrieu. Her challenger in the
coming fall election, Congressman Bill Cassidy, papered the state with press
releases exclaiming, “This is a great day for Louisiana.”
None
of back slapping statements alluded to the fact that these same members of
congress had been responsible for the huge premium increases in the first
place. Every member of the current Louisiana
congressional delegation, as well as state insurance officials had been asleep
at the switch when federal legislation proposed the massive increase in the
cost of flood insurance
for Louisiana property owners, and they had failed to oppose it. No one
wanted to talk about that.
Even
the press was gushing over the purported legislative victory. A Times
Picayune editorial bellowed, “Hallelujah. Homeowners can stop worrying
about whether they will still be able to afford their homes or whether
excessive flood insurance premiums will force them out.” The
Morning Advocate chimed in calling the legislation a “remarkable
achievement” and “a victory made for Louisiana.”
So
property owners in flood prone areas can rest in peace knowing congress has
stopped the huge rise in the cost of flood insurance. Right?
Well, not quite. The Times
Picayune editorial stated that $200,000.00 in flood coverage would cost $2,000.00
a year. But remember, this is just for
the current year. Under the new legislation,
insurance rates can then rise up to 18% a year every year thereafter. In addition, a yearly fee or surcharge of up
to $250.00 can and will be levied on each policy. Every year.
Just
how much will these increases cause the cost of a flood policy to rise? The first year will see a jump from $2000.00
to $2360.00. After three years this same $2000.00 policy will jump up to $3286.00. After five years, the increase will total
$4575.00. And ten years from now? That same $2000.00 policy will cost the
property owner $10,223.00. And this does
not include that surcharge of up to $250.00 per year. According to congress, these rates are
supposed to be affordable for the average homeowner? Come on, man!
A
cynic might conclude that congress merely bought some time to get through the
next election before property owners find out what a sham this new solution is. Remember, these figures only apply to flood
insurance rates. Property owners in
Louisiana still are paying the highest property insurance rates in the nation
-- far above the national average of $2,700.00.
When
you add flood insurance costs to the regular property insurance premium of a
home in the $200,000.00 range and add the surcharge, many Louisiana homeowners
will pay more than $5000.00 for the first year, then a continuing and dramatic
rise in rates that will be required to own a home. And this is something to high five
about? It’s obvious that congress, particularly
its Louisiana members, needs to go back to the drawing board and find
reasonable solutions to this immense and growing problem.
There
are workable options, and that’s a discussion for another column. But all the cheering over this quick fix by
congress is little more than smoke and mirrors. Louisianans need real long-term
solutions for a problem of homeowner affordability that will not go away and
cannot wait. Not even till the next
election.
*******
“It’s not hurricanes that are
causing high insurance rates, but bad public policy.”
Policy Analyst Michelle Minton
Peace
and Justice
Jim Brown’s syndicated column
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