Flood Insurance Trouble Not Over

It should have come as no surprise that officials in the National Flood Insurance Program took a 2012 reform law as license to do whatever they pleased. After all, their boss, President Barack Obama, has told both Congress and the American people repeatedly that what the law says means virtually nothing to him. His policy has been to rewrite the statute books at will.

But public outcry over NFIP officials’ decision to increase flood insurance rates drastically forced a change in plans.

As we began reporting just a few months ago, flood insurance premiums for thousands of Ohio Valley residents were scheduled to go through the roof – far out of relation to property owners’ claims histories. One area resident said his premiums had increased to the point that in eight years, he would have paid the NFIP enough to cover replacement of his home. As longtime valley residents understand, that isn’t how Ohio River floods work.

But NFIP officials have a good reason for wanting more money. The program has a deficit of about $24 billion. Clearly, someone ought to be paying higher rates for flood insurance.

That someone appears to be owners of coastal properties. Nearly all the NFIP deficit stems from claims paid in the wake of Hurricane Katrina and Superstorm Sandy.

NFIP officials felt empowered by the 2012 Biggert-Waters Act. It specified the agency was to conduct a thorough review of flood plain information to determine realistic rates for insurance. Instead, they launched a shoot-from-the-hip campaign of drastic increases.

Members of both the U.S. Senate and House of Representatives felt misled – and rightly so – by the NFIP action. Earlier this month, both houses approved bills to require delays in implementation of flood insurance rate increases.

Obama has said he will sign the bills. That may be because, in both houses, the margins of approval were veto-proof.

Lawmakers should not rest on the issue, however. Clearly, they need to ride herd on the NFIP, insisting the agency get its rates right this time. If experience with the Obama administration is any guide, agency officials already are thinking of ways to get around the congressional mandate – and do what they wanted anyway.