Other Opinions

Flood insurance must remain affordable

Rep. Steven Palazzo
Rep. Steven Palazzo

Flooding historically and continuously is the most costly natural phenomenon that faces humanity. Since 2007, there have been over 22,700 floods recorded by NOAA, and the catastrophic damage caused by flooding affects all 50 states. The devastation caused by flooding leaves a permanent scar on the families and communities that are left to recover.

To help provide protection for America’s homeowners, Congress created the National Flood Insurance Program to offer affordable flood insurance. The NFIP is critically important to the Mississippi Gulf Coast. In our state alone, there are more than 64,000 policies in force that rely on the NFIP to protect homes from the threats of major flooding events. The median home value in Mississippi is $97,500 and the median household income is $37,963, so, contrary to popular belief, you don’t have to be a multimillionaire to live on or near the water. This program is renewed every five years and the current iteration is set to expire Sept. 30.

All of us on the Coast remember the 2012 reauthorization — FEMA decided to implement drastic rate increases on policyholders, threatening to destroy the housing market in the process. I, along with my Gulf Coast colleagues, joined with Northeast legislators to roll back these extreme rate increases in 2014, and as a result the insurance market became steady.

But some in Congress, including some in my own party, are trying to raise rates yet again. Despite the fact that the NFIP was created decades ago to protect homeowners, many believe everyone’s rates should go up just to make sure it can fund outlier events like Hurricane Katrina. I will not let this happen.

Make no mistake, the NFIP program is in debt and needs updating. But if you take out Katrina and Superstorm Sandy, the NFIP program is billions in the black. We can change the underlying problems without putting the costs on the backs of homeowners. These people have played by the rules, built to code, and FEMA changing the maps or adjusting rates is simply not fair.

In June, the House Financial Services Committee finalized a package of bills that make a number of reforms to both the NFIP and FEMA. Some of these reforms are well-intentioned, such as trying to bring back a private flood insurance market and offering changes to how FEMA can re-map properties.

But some parts of the bill are unacceptable. There were several concerning provisions that would directly impact the component of affordability, including the elimination of grandfathered properties, higher rate increases, and a prohibition on policies for any new home construction. When we saw what the bill looked like, we immediately reached out to stakeholders across South Mississippi to help us fix the legislation.

Today, I can say that we have successfully taken out the worst parts of this bill. Several weeks ago, I joined 25 other Republican members in writing our House leadership to oppose the Financial Services Committee bill in its current form. This was enough votes to kill any bill on the House floor. And they listened. The new draft has removed the harmful provision that prohibited new construction in special flood hazard areas, lowered the proposed rate minimum annual rate increase and preserved grandfathering.

I also think it’s important to know that there are a number of other NFIP reauthorization options on the table in Congress, some of which will be weaved into the final product.

One of the best is the SAFE NFIP Reauthorization Act of 2017, which I co-sponsored in the House. This bill reauthorizes the NFIP for six years, caps any rate increases even further, freezes interest payments on the NFIP debt (freeing up more funds for disaster response), and allows greater access to pre-disaster mitigation funds. The Senate companion bill has wide support as well. This is the gold standard we would like to see passed in the House and Senate, providing the ultimate protection for homeowners.

Other options include a longer reauthorization term of 10 years, a faster move to the private insurance market, and better protection for low-income families.

Our No. 1 goal is to ensure flood insurance remains available and affordable, and any NFIP reauthorization must meet that goal or I will see that it is never signed into law.