Most Louisiana representatives vote for flood insurance program overhaul

Only Rodney Alexander, R-Quitman, voted against measure, which now moves to the Senate

WASHINGTON -- The House voted Thursday to extend the federal flood insurance program for five years while also increasing coverage limits and blocking premium increases for homeowners whose local levee systems were recently decertified by the Federal Emergency Management Agency.

The decertification occurred for communities where levees are not rated to protect against a 100-year hurricane.

"Many small communities in Louisiana have worked hard to build and maintain their own levee systems and are now being treated as if they do not have any flood protection at all," said Rep. Charlie Melancon, D-Napoleonville, who sponsored the amendment to cancel rate increases for communities without 100-year protection. "My amendment will lower insurance costs for many Louisiana homeowners and small businesses."

If a similar bill is adopted in the Senate, it would end a process that has required multiple short-term extensions of the flood insurance program. Three times this year the program lapsed because Congress has not authorized the program, resulting in postponed home sale closings and delays for people trying to renew their policies.

There is no word when the Senate might take up the measure.

"Louisiana homeowners should not be left in limbo while Congress recklessly allows the program to expire over and over," said Rep. Steve Scalise, R-Jefferson, after the 329-90 vote on the five year program extension.

All of the Louisiana members except Rep. Rodney Alexander, R-Quitman, voted for the bill.

The federal flood insurance program, begun in 1968, covers more than 5 million homeowners, including 500,000 in Louisiana. Average premiums are about $570 a year.

The bill would make the first major changes in the program since 1994. Those changes include:

• Maximum coverage limits are increased from $250,000 to $335,000, and maximum coverage for a home's contents is raised from $100,000 to $135,000. Higher coverage would result in higher premiums, according to the bill's sponsors.
• Premium rates, which are now limited to 10 percent increases annually, could jump under the bill by as much as 20 percent a year.
• People living in communities that under FEMA remapping were designated for the first time as flood threats would be given a five-year grace period before the requirement to buy flood insurance would take effect.
• Premium subsidies for second homes and vacation homes would be phased out.
• FEMA would be required to report to Congress how it will repay, within 10 years, money borrowed from the U.S. Treasury to cover the costs of claims resulting from the 2005 hurricanes. The legislation, however, does not provide any real suggestions of how to close the $18.7 billion deficit.

Rep. Gene Taylor, D-Miss., complained that the House Rules Committee refused to allow a vote on his amendment to expand the flood insurance program to include wind coverage. Taylor, whose Mississippi home was destroyed during Hurricane Katrina, said insurance companies blamed losses on water damage to unfairly avoid paying claims and pushed the costs onto the federal flood insurance program.

He also complained that residents in many coastal communities, nearly five years after Katrina, are still having a hard time finding affordable wind coverage in the private marketplace.

But the insurance industry heavily lobbied against the proposal, which was approved by the House two years ago. In the Senate, the wind proposal was killed in committee, and the Obama administration has raised questions about adding what could be a costly benefit to a program already heavily in debt.

Taylor won approval, however, for an amendment to require private insurers that contract with the federal flood insurance program to make fair adjustments when a property suffers both wind and flood damage.

Bruce Alpert can be reached at balpert@timespicayune.com or 202.383.7861.