Homeowners who need federal flood insurance can breathe easier. Following a tidal wave of complaints about enormous cost increases for many coastal homeowners' insurance plans, the House of Representatives rushed a rescue program to approval last week.
It was telling that the three South Carolina representatives whose districts include the coastal region supported the House bill. Reps. James Clyburn, a Democrat, and Republican Reps. Mark Sanford and Tom Rice backed a restart for federal flood insurance reform.
First District Rep. Sanford said the legislation addresses "many of the unintended consequences of the Biggert-Waters Act," which sought to improve the growing fiscal problems with the flood insurance program.
Program changes raised some policy prices so high as to make houses virtually impossible to sell.
Rep. Sanford said the bill "begins the process of providing markets and people a reasonable amount of time to respond and plan for these coming changes to policies, and I believe that is what a majority of people back home need."
Rep. Sanford added: "As governor, my administration worked to reform government so that it was less burdensome on the taxpayer ... so I certainly hear and understand the voices of those calling for changes to the National Flood Insurance Program. But you can't solve the problem overnight, especially one that involves considerable financial exposure for the individual who ... has relied on promises government has made in the past."
The House bill caps annual price increases in order to prevent sticker shock, a move that will slow the pace of the authorized transition to actuarially sound policies.
It also reinstates grandfathering of buildings built to a previous code standard.
Homeowners who upgrade to a new policy will be allowed to do so without being assigned to a new risk category.
And homeowners who overpaid under the new rules will be reimbursed.
The Federal Emergency Management Agency (FEMA) is directed to "strive to minimize" policies with premiums that exceed one percent of the insured amount.
The bill also directs FEMA to improve communications with homeowners, provide them with advance information on proposed new flood maps that might change their insurance status and increase insurance rates, and facilitate and reduce the cost of appeals.
The bipartisan legislation was brought to the floor under rules that allowed it to bypass the requirement for a report by a regular committee. This was a necessary step because the relevant committee chairman, Rep. Jeb Hensarling, R-Texas, is opposed to relaxing the 2012 legal requirement that the federal flood insurance program put an end to subsidies that require a bailout by taxpayers.
However, Rep. Hensarling did not stand in the way of the urgently needed relaxation of the 2012 law. The bill easily met the requirement that it have the support of two-thirds of the voting representatives and sailed through the House with few objections.
A somewhat different bill has already passed the Senate with a two-thirds majority. But its sponsors have been quoted as saying they can support the House bill, eliminating the need for a conference to reconcile the two approaches.
The swift bipartisan response to the unintended consequences of the 2012 law was an all-too-rare example of the federal lawmakers crossing the aisle for the common good.
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