La. officials concerned about flood insurance changes La. officials concerned about flood insurance changes by jordan blum| Advocate Washington bureau May 16, 2013 Comments WASHINGTON — Many thousands of southern Louisiana residents could see their flood insurance rates “skyrocket” starting as soon as October without federal and congressional action, a group of parish presidents and business leaders warned Wednesday. The large group trekked to Washington, D.C., this week for meetings with the Federal Emergency Management Agency and congressional members over concerns about National Flood Insurance Program changes voted into law last year. The fear is that proposed flood maps will cost Louisiana residents and business owners a lot more in the congressional effort to make the flood insurance program more self-sustainable. “This is really going to be more devastating than the storms themselves,” said Jefferson Parish President John Young, who joined the Greater New Orleans, Inc.-organized trip. The proposed flood maps are still under federal review but more parts of the state’s coast are becoming high-risk velocity zones, or V-zones, where insurance rates increase more. The program also is going to start phasing out “grandfathered” rates next year. The NFIP allows homeowners and businesses in flood zones that have trouble getting private insurance to obtain policies backed by the federal government. Nearly 500,000 people in Louisiana participate in the NFIP. The program has been in financial distress with a loss of $18 billion, largely due to payments made after hurricanes Katrina and Rita in 2005. U.S. Sen. Mary Landrieu, D-La., filed an amendment this week to delay the implementation of the rate hikes until the results are further assessed. “It doesn’t totally solve the problem,” Young said about the amendment. “It’s a good first step.” Natalie Robottom, president of St. John the Baptist Parish that sustained major flooding from Hurricane Isaac last year, said FEMA’s estimates are proving woefully inaccurate. “Everyone we’ve spoken with suggested earlier that a very small number of residents and homeowners and business owners would be impacted by the change and that’s not happening,” Robottom said. FEMA estimated that more than 400,000 of those in the program in the state would not face immediate impacts, although they are subject to annual rate increases. Another 50,000 properties will maintain grandfathered subsidies until they are, but GNO, Inc. President and CEO Michael Hecht argued that will make them “unsellable.” FEMA contends that only close to 20,000 policies in Louisiana will switch to the higher risk zones and face up to 25 percent rate hikes a year. The Louisiana coalition is contesting those estimates. Hecht also argued that the 25 percent annual hikes are based on the maximum final cost and not the current base rates. Bill Bubrig, a Belle Chasse resident and independent insurance salesman, said his residence was built above code levels in 1998 and that he pays more than $600 annually for flood insurance. He said the only flooding he had was some garage flooding from Hurricane Katrina. But the proposed maps move him out of code and give him a maximum eventual rate price of $27,000 a year. Based on the maximum cost, he and Hecht said he could face nearly $5,000 rate increases each year. Almost no one can afford that, Hecht said. “Louisiana is on the leading edge of this issue,” Hecht said, noting that other parts of the country will deal with similar problems. “What’s happening in Plaquemines (Parish) is going it happen in Brooklyn; it’s going to be happening in Sacramento; it’s going to be happening in Florida.” Hecht complained that the mapping only recognizes 100-year levees and not other pumping structures or 50-year levees that are often funded locally. Parish officials, for instance, noted that the changes factor past flood events, like Katrina, without fully recognizing the levee system improvements made since in New Orleans. Ascension Parish Councilman Randy Clouatre was more critical though. “I don’t think this was ever thought through on the national level,” Clouatre said. “We get the deer in the headlights look up here from the people that represent us, from the people that voted for this act and also from FEMA,” he added. While the flood insurance reauthorization is known as the Biggert-Waters Flood Insurance Reform Act of 2012 after the names of its U.S. House sponsors, U.S. Sen. David Vitter, R-La., sponsored it on the Senate side. The bill skipped separate floor consideration and ended up as a late addition to an omnibus federal transportation bill that became law last summer. While everyone knew the changes would increase flood insurance for some, Vitter said the current estimates do not match what experts were reporting last year. “There was no hint of anything extreme like there is now,” Vitter said Wednesday. “Part of the problem is none of us know exactly where the rate will land.” Vitter said he is pressing FEMA officials on the matter and that he is requesting a congressional hearing. “I’m a homeowner in southern Louisiana, so I get it,” he said. While Vitter may be right about the “extreme” aspects, Landrieu complained last year multiple times about the potential rate hikes on many working-class families in Louisiana. She also expressed frustration that the bill was included in the omnibus transportation legislation so she was unable to amend it at the time. She predicted that it would need to be fixed this year. ä ON THE INTERNET: Additional information on the flood maps is available online at http://maps.riskmap6.com/ and details on the legal changes can be viewed at www.fema.gov/national-flood-insurance-program/flood-insurance-reform-act-2012.