Washington – Saying that more than 18,000 Connecticut homeowners will be socked with soaring flood insurance premiums, Sen. Richard Blumenthal and Rep. Rosa DeLauro are pressing the House of Representatives to pass a bill that would stop those increases.
“Tens of thousands of families are suffering from the uncertainty of not knowing whether they will be able to pay their flood insurance premiums,” DeLauro said.
Flanked by New Haven Mayor Toni Harp and Milford Mayor Ben Blake, the lawmakers held a news conference Friday in Stratford with Connecticut residents who want to sell their homes but say flood insurance premium increases are scaring prospective buyers away.
Premium increases in the federal flood insurance program, administered by the Federal Emergency Management Agency, are the result of a bill approved by Congress in 2012. The legislation, known as the Biggert-Waters Act, aimed at making the program — hard hit by Hurricane Katrina claims — solvent. The flood insurance program went further into the red after Hurricane Sandy, which led to nearly $10 billion in claims. The program is now $24 billion in debt.
All homeowners with mortgages in areas FEMA determines are at risk of flooding are required to buy flood insurance, sold by private insurers but subsidized by the federal government. Others voluntarily purchase the coverage because standard homeowner policies do not cover flood damage.
Jody Rowell, who bought a home in New Haven’s Morse Cove neighborhood for $175,000 last year, said she was notified that her flood insurance premium will jump from $1,600 to $5,000 because of the new provisions in the Biggert-Waters Act.
“I’ll have to borrow money from my 80-year-old mother to be able to stay here another year,” said Rowell, a single mother who earns less than $60,000 a year.
She said the high cost of insuring her home, which is more than a block from the ocean but close to a creek, will deter prospective buyers.
“This is a lot of money for someone who wants to buy a modest home,” Rowell said. “This was not thought out very well at all.”
Some of the Biggert-Waters premium increases were put on hold by a provision in the omnibus spending bill Congress approved last month. The provision delayed premium increases for homes that were considered to be at higher risk after Hurricane Sandy prompted FEMA to draft new flood maps.
But a bill approved by the Senate on a bipartisan 67-32 vote last week — with the help of Blumenthal and fellow Connecticut Democrat Sen. Chris Murphy – would go even further. It would delay the Biggert-Waters phase-out of premium subsidies for vacation homes, businesses and properties that have been severely and repeatedly flooded. As the law stands, thousands of Connecticut residents face 25 percent premium increases each year until their flood insurance premium matches their risk.
The bill would also remove a restriction that prevents homeowners from passing along their flood insurance subsidies to anyone who buys their home.
The Senate-approved legislation would delay all premium increases for up to four years until new flood maps are reviewed for accuracy, and FEMA conducts an affordability study on the new premiums.
Blumenthal said the new, post-Sandy flood maps are badly flawed.
“All properties affected by these skyrocketing rates are not just along the shore but deep inland because the maps are inaccurate,” he said. “The maps are inaccurate, and the premiums are unaffordable.”
But the Biggert-Waters Act is popular with House conservatives, who say the federal government has no business subsidizing insurance policies for coastal homeowners. House Speaker John Boehner, R-Ohio, said Thursday that the House would address the issue this year, but he does not support the sweeping delays passed by the Senate.
“What short of what the Senate did would be effective?” Blumenthal asked. “To Speaker Boehner I would say, ‘Look at the bipartisan majority in the Senate that approved this measure.’”
The following are the numbers in Connecticut related to the National Flood Insurance Program as of Nov. 30, 2013, according to the state Department of Energy and Environmental Protection:
- Number of Policies = 43,331
- Insurance in Force = $10,394,632,400
- Premiums = $53,497,915
- Number of Claims Since 1978 = 27,198
- Claims Paid = $485,976,068
Reporter Jan Ellen Spiegel contributed to this story.