Flood insurance premium increases may not go into effect until 2015 or even 2016 for some homeowners and businesses, according to Rep. Bill Cassidy.
“This is great news for many working families in Louisiana. This announcement means that nearly 400,000 Louisiana homeowners won’t face flood insurance rate hikes (until) as long as June 2016. Meanwhile, we will continue working for longer-term and permanent flood insurance reforms,” said Cassidy, R-Baton Rouge, in a prepared statement.
Sen. Mary Landrieu, D-La., quickly jumped in to say she was happy to help put the short-term solution in place. She said a more permanent solution is needed to prevent the middle class from being hit with catastrophic rate increases.
Cassidy is challenging Landrieu’s re-election bid.
“Our ultimate goal must be to pass the coalition-backed bill that overwhelmingly passed the Senate last week with bipartisan support. I look forward to working with both Republicans and Democrats in the House to find a path forward and get this bill to the President’s desk,” Landrieu said in a statement.
The delay touted by Cassidy and Landrieu will help property owners swept into flood zones through redrawn maps. People who live or own businesses in areas that chronically flood will not be helped. People insuring second homes or trying to sell their homes still are in a pickle.
The Consolidated Appropriations Act of 2014 suspended insurance rate hikes for those who voluntarily bought flood insurance and were later drawn into maps outlining areas that could flood, thereby dramatically increasing the cost of the policies.
It is a short term solution for some Louisiana property owners covered by the National Flood Insurance Program.
In an attempt to become more financially solvent, the NFIP phased out the special status that limited premiums on many properties built decades ago, as well as increased rates on newer properties.
For many Louisiana property owners, the changes caused premiums to skyrocket. One legislator shared anecdotal evidence of a homeowner’s rate jumping from $400 to $24,000.
The Homeowner Flood Insurance Affordability Act would delay by about four years the insurance hikes on primary residences — excluding properties that suffered repeated flooding — that have received “grandfathered” lower premiums. The legislation also would delay a property sale “trigger” that ushers in higher premiums. The act awaits a vote of the U.S. House.
In the meantime, NFIP said this week that the Consolidated Appropriations Act of 2014 - the temporary solution to part of the problem - triggered delays of 12 to 18 months to develop materials related to the changes.