Our Views: A victory and its costs

We don’t take anything back from our praise for Louisiana’s delegation in Congress and the many others who worked to avoid catastrophic increases in flood insurance.

Passing the fix, a new law just signed by President Barack Obama, was a tremendous victory for Louisiana and other coastal states.

On Capitol Hill, even victory comes with a price, and the fact is that over time flood insurance rates likely will rise.

There is little or nothing the Louisiana delegation could do to avoid that reality.

The original 2012 law, the Biggert-Waters Act, was intended to reduce the $24 billion debt of the National Flood Insurance Program, but Louisiana lawmakers and groups involved in real estate saw that the drastic increases would hammer the markets in coastal areas.

Yet for all the dramatic success of the Louisiana lawmakers, rates are going up. An Associated Press analysis of data from the Federal Emergency Management Agency indicates more than 64,000 flood insurance policyholders in Louisiana face increases of up to 18 percent per year under the fix.

“This at least makes the challenge manageable,” state Insurance Commissioner Jim Donelon said. “It was absolutely ruinous before.”

The “affordability target” under this year’s amendment is intended to hold increases under 1 percent of the property’s insured value.

That’s not a requirement, though, warned Sen. Mary Landrieu, D-La., who said the delegation will continue to work to make insurance more affordable.

Biggert-Waters was a five-year reauthorization of the National Flood Insurance Program, and in 2017 it will be up for renewal.

At that time, we hope we’ll be able to say the many middle-class homeowners and business owners in Louisiana will not have seen the kind of rate hikes contemplated in the original 2012 Biggert-Waters.

Among other things, Biggert-Waters erased grandfathering rules that protected properties from price increases if updated flood maps put them in a new flood zone.

The new bill restores those lost grandfather protections, meaning new flood maps won’t trigger massive, immediate rate increases, and that’s a great help. Ownership changes also will no longer trigger an immediate jump to a risk-based rate. People hit by sky-high premiums after buying a new policy on a previously subsidized home will be able to claim a refund.

But even in the amended version, there will be much discussion over how much flood protection is provided by levees built by state and local government. A somewhat arcane formula from elevation surveys will affect premiums for many policyholders.

Louisiana is a lot better off after the legislative victory on Biggert-Waters, but that must be tempered with the knowledge that costs for insurance are going to go up.