The Times West Virginian

January 12, 2014

State lawmakers concerned about increased flood insurance rates

By Jessica Borders
Times West Virginian

FAIRMONT — Lawmakers representing West Virginia are worried about the impact of increased flood insurance costs on local families and are trying to take action.

In the Biggert-Waters Flood Insurance Reform Act of 2012, U.S. Congress mandated that the Federal Emergency Management Agency, along with other entities, modify the operations of the National Flood Insurance Program. The law, passed in July 2012, continues the federal program for five years, according to FEMA’s website.

The program was initially started in 1968 to keep insurance entities from eliminating flood damage protection from insurance policies. It allowed property owners to buy flood insurance, as long as their community followed the floodplain management rules and minimum guidelines for building new structures.

“Key provisions of the legislation will require the NFIP to raise rates to reflect true flood risk, make the program more financially stable, and change how Flood Insurance Rate Map (FIRM) updates impact policyholders,” states.

“The changes will mean premium rate increases for some — but not all — policyholders over time.”

FEMA explains that only about 20 percent of flood insurance policyholders pay subsidized rates, and the other 80 percent do not. The only policyholders who will experience rising premiums are “those subsidized policies covering non-primary residences, businesses and severe repetitive loss properties.”

Randy Swartzmiller, D-Hancock, speaker pro tempore for the West Virginia House of Delegates, explained that the Biggert-Waters Act was a way

for Congress to try to replenish the National Flood Insurance Program fund, which had a lot of money going out because of catastrophes such as Hurricane Katrina and Superstorm Sandy and didn’t have much coming back in.

The law was a measure to spread the program costs among everybody in the country, even those not in high-prone destruction areas, he said.

Due to storms on beachfront or oceanfront properties, people in West Virginia and other states are seeing astronomical flood insurance rate increases. Swartzmiller said he has heard many stories about state residents who have been impacted by this law, and he talked to his colleagues about the issue.

Because the Biggert-Waters Act is federal legislation, the leadership of the House of Delegates decided that the best action it could take was to pass and send a resolution to Washington, D.C.

The House has been working to create the resolution to let federal lawmakers know that citizens shouldn’t be asked to absorb these astronomical costs for flood-related events that they have no control over and don’t even happen in their areas, he said.

Swartzmiller compared this problem to West Virginia’s auto insurance, which is higher than some of the surrounding states due to the nature of the curvy roads and collisions with deer. However, people on the coast aren’t absorbing those costs for West Virginia.

The House leadership wants Congress to revisit and revise the Biggert-Waters Act and not put this unjust burden on West Virginia premiums, he said.

“This isn’t a Democrat or a Republican issue,” Swartzmiller said. “It’s an issue about the folks of West Virginia. Unfortunately, it affects everyone. We just want to try to help these folks out.”

People should be using their hard-earned money for purposes other than high insurance payments. Residents understand that they must pay a little more for insurance if they live in an area that gets flooded, but the Biggert-Waters Act is unfair, Swartzmiller said.

The House hopes to vote on the passage of the resolution as soon as possible. Swartzmiller added that House Speaker Tim Miley, D-Harrison, understands the serious nature of this issue that is affecting citizens and wants to follow up with the leaders in Washington, D.C.

Mike Caputo, D-Marion, majority whip for the House of Delegates, said he’s very concerned about the possibility of the rising cost of flood insurance.

“I’m just certainly concerned that actions taken by our federal government could indeed raise flood insurance for people in Marion County and the entire state of West Virginia,” he said.

“We want Congress to know that we are very concerned about this and that we believe that our residents can’t stand a rate increase to cover them and protect them from flood disasters.”

The state is sending a message to the congressional leaders that they need to review this issue and do all that they can to alleviate this cost burden, Caputo said.

“The problem facing West Virginians, and many people across the country, is that they are struggling to pay these unacceptably high, and in many cases, unaffordable premium rates,” U.S. Sen. Joe Manchin, D-W.Va., said via email. “Since these rates have skyrocketed so abruptly, many homeowners are also discovering that it’s much harder to sell their homes.”

He said he heard from a family in West Virginia whose flood insurance premium is going from $700 annually to over $10,000 a year.

“Sadly, this is just one of the many horror stories I have received from citizens across the Mountain State,” Manchin said.

He has cosponsored the “Homeowner Flood Insurance Affordability Act” with 28 other senators. The intention of this proposed legislation is to postpone the impacts of the Biggert-Waters Act for four years for specific kinds of properties.

Manchin said the delay would apply to homes and businesses that are currently “grandfathered,” meaning they were constructed to code but remapped into a higher risk area at a later time, and get subsidies; as well as sites that bought a new flood insurance policy after July 6, 2012, or were sold after that date.

“New homeowners and business owners will continue to receive the same treatment as the previous owner unless these properties trigger another provision in Biggert-Waters such as experiencing severe repetitive loss from flooding, are a non-primary residence (a second home), or have substantial damage from floods,” Manchin said.

The additional time will give FEMA as much as two and a half more years to complete the affordability study mandated through the Biggert-Waters Act, and also give Congress 18 months to examine new rules that FEMA could suggest following the study, he said.

“I am hopeful that this additional time will provide an opportunity to create a more permanent fix to the NFIP without requiring hardworking West Virginians who live within their means to make excessive payments they can’t afford,” Manchin said.

On Jan. 8, U.S. Congressman David McKinley, R-W.Va., and Congressman Bill Johnson, R-Ohio, sent a letter to John Boehner, speaker of the U.S. House of Representatives, to highlight the Biggert-Waters Act’s unintended and unexpected consequence of high premiums for residents.

“We have heard from hundreds of home owners, Realtors and insurance agents who have shared nightmare stories,” the letter states. “Some people are faced with premiums as much as 10 times higher than in previous years. Many homeowners are finding it impossible to sell their property because no one is willing to shoulder the cost of purchasing a new flood insurance policy.

“These are just a few examples of how these reforms are already hurting families. The long-term impacts could be even more severe. Many middle-class families in communities along the Ohio River could be priced out of home ownership altogether. These changes could hurt entire neighborhoods and communities by depressing home prices and increasing vacancy.”

The document says that FEMA must have additional time to make changes to the National Flood Insurance Program that are more appropriate and fair and don’t cause hardships for families.

McKinley and Johnson understand that the program must be improved so it is able to support itself, but believe that the current action is not the right way to achieve that goal.

Email Jessica Borders at or follow her on Twitter @JBordersTWV.