As the clamor increases for Congress to postpone rate hikes for federal flood insurance, property owners — many of them in Pinellas County — face premiums that could jump thousands of dollars October 1.
Now it’s Congress’ chance to feel disappointment.
Craig Fugate, director of the Federal Emergency Management Agency (FEMA), frustrated many lawmakers when he told a Senate subcommittee he has no power to postpone changes simply because premiums will become too expensive.
“I need help. I have not found a way to delay … without some additional legislative support,” Fugate told members of the economic policy subcommittee of the Senate Banking, Housing and Urban Affairs committee, as reported in the Capstone Risk Management Insurance blog.
“There is no provision for affordability in this law,” he added, addressing many of the legislators who urged him to take administrative action to delay the bill’s reforms.
If the Obama administration can delay parts of Affordable Care Act, said Republican U.S. Sen. David Vitter from Louisiana, then it can delay parts of the Biggert-Waters Act, which passed last year to reform the federal flood insurance system.
“It is clearly not ready for prime time,” added Vitter, who was one of the main voices in the desire to halt the rate hikes from Biggert-Waters.
The new law ends subsidies for around 20 percent of the 5.5 million policyholders — nearly 1.1 million households — with almost 13 percent of subsidized homes located in Pinellas County.
Senators also spoke of complaints from constituents finding themselves in flood zones for the first time on new FEMA flood maps required by Biggert-Waters. This leaves them paying thousands of dollars in flood insurance premiums, required by most mortgage holders. Many of the increases will be phased in over five years.
Vitter questioned increasing payments to private insurers and agents equaling 30 percent of the premium, without them assuming any risk.
“To this pro-business Republican,” Vitter said, “that seems absurd.”