Congress At War Over National Flood Insurance Program -

Congress At War Over National Flood Insurance Program

Congress Set to Battle Over National Flood Insurance Program

NFIP flood insurance
Sgt. 1st Class Keith Bart, UH-60 Black Hawk crew chief, carries an animal to safety, during a flood rescue and recovery operation. (Photo by Sgt. Jonathan C. Thibault, 4th Combat Aviation Brigade Public Affairs Office, 4th Infantry Division)

The Great Midwest Flood of 1993 was a horrific event.  It ranks as one of the most devastating flood disasters in U.S. history.

The flooding started during May 1993 and dragged on until September. In some of the worst-hit areas, the floodwaters took until October to recede and more than a thousand levees failed when waters exceeded worst-case design specs.

In parts of Missouri flood waters ran more than 13  feet over flood stage in downtown areas and swamped parts of the city of St. Louis.

Alice Rothermich was a first-hand witness to the power and devastation the rising waters caused as she stood by as more than seven inches of water and muck covered her living-room floor. Once she and her husband, Gerald, cleaned up the mess, they decided to stay in their home and make the best of it.

“Who ever thought it would get this far?” Rothermich said.

The National Flood Insurance Program (NFIP) is set to expire in September, and lawmakers are butting heads over reforms proposed for the program. Some legislators say their aim is to ensure that rates reflect the risks of flooding while mollifying states less prone to flooding who aren’t pleased with what they say is “their role in subsidizing those states with greater flood risks.”

“It is critical that we get the program back on solid financial ground after large-scale disasters in recent years pushed it underwater. We have to take steps this year to give consumers more flood insurance options,” says U.S. Sen. Jon Tester (D-Mont.).

In 1993, nine states: North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri, Wisconsin and Illinois felt the brunt of the rushing waters.

Fifty people died in the surging floodwaters, and fifty-four thousand were left homeless or needed emergency shelter and temporary housing. Fifty thousand homes were destroyed or damaged and more than 75 communities disappeared under the merciless waters.

Property damages were tallied at from between $12 and $16 billion. Estimates pegged the price for the federal response to the wreckage at $4.2 billion, and in addition, the government doled out disaster recovery loans north of $621 million to individuals and businesses.

FEMA says the total costs associated with the disaster would have climbed higher if not for the flood insurance policies issued by the National Flood Insurance Program. Those property owners had paid up out of their own pockets with the purchase of flood insurance.

Tester and U.S. Sen. Dean Heller (R-Nev.) introduced a bill to overhaul the program and encourage private insurance companies to step in to serve the need.

While similar legislation has been introduced in the House which includes an option to rewrite the flood insurance pricing structure using a sharper and more accurate risk-based formula, House Financial Services Committee Chairman Jeb Hensarling says it’s his goal to privatize the program entirely.

The House version of the program includes revisions aimed at improving the ongoing solvency of the NFIP, and legislators hope that will encourage the private sector to offer competing products.

For his part, Hensarling says he could be convinced to back bipartisan efforts to stabilize the rates and improve the flood maps, his goal is to make the market attractive enough to private insurers to make them jump on board.

The National Flood Insurance Program was enacted to reduce the impact of flooding on private and public structures, and it does that by providing affordable insurance to property owners and by “encouraging communities to adopt and enforce floodplain management regulations.”  The idea is to aid in efforts to mitigate the effects of flooding on structures, and the NFIP says the program reduces the socio-economic impact of disasters by “promoting the purchase and retention of general risk insurance” and of flood insurance in particular.

flood insurance rates
Photo by Andrea Booher