Little consensus to be found on the complete flood insurance solution

WASHINGTON — As lawmakers consider reauthorizing the National Flood Insurance Program before it expires in September, the Federal Emergency Management Agency has urged senators to enact broader reforms to the program. What they got instead was a lukewarm response.

David Maurstad, acting associate administrator of FEMA, testified Thursday before the Senate Banking Committee to expose more than a dozen ways that lawmakers could reform financially desperate NFIP, which provides $1.3 trillion in flood insurance coverage for homeowners and businesses across the United States

“Today, as our changing climate poses a serious threat to our nation, and as the number and severity of disasters continue to increase, the NFIP requires structural change,” Maurstad said in prepared remarks Thursday.

Hurricane Ida damaged the town of Laplace, Louisiana in September 2021. National Flood Insurance Program authorization is scheduled to expire in September.

Bloomberg News

But lawmakers from both political parties appeared to have serious reservations about various elements of FEMA’s legislative reform proposal, which, if passed, would allow the federal agency to offer payment plans. insurance, to ban insurance coverage for the most frequently flooded properties and to cancel more than $20 billion in debt owed by FEMA to the Treasury Department.

“Before I get to my questions, I want to point out that I find it unusual that FEMA sent Congress, unsolicited, 17 clearance bills that I believe will cause significant harm to both the program and owners,” the senator said. Bob Menendez, DN.J. “FEMA’s proposal will lead to more people being uninsured and unprotected from more frequent storms, [and] higher costs for families and greater barriers to owning a home and small business.

Only two Republicans asked questions during Thursday’s Senate hearing. Ranking member Pat Toomey of Pennsylvania, who is set to retire from Congress in 2023, appeared to support some elements of FEMA’s reform proposal, including a measure that would prevent national flood insurance from being offered. to what Maurstad described as “extreme repetitive loss properties”. – properties which the administrator said were responsible for a “disproportionate share of overall losses and pose a high risk of future flooding”.

In his opening remarks, Toomey said a legislative change banning NFIP coverage for “excessive loss properties” was an “intrinsically good policy that merits consideration.”

But other senators — Republicans and Democrats alike — focused their questions on the experience of their constituents who had recently participated in the NFIP. Lawmakers seemed particularly sensitive to any policy changes that could increase the costs for homeowners to participate in the program.

Sen. John Kennedy, R-La., pressed Maurstad for agency details Risk Rating System 2.0 within the NFIP, a new methodology for setting flood insurance premiums that raised premiums for some consumers and lowered others.

“Why doesn’t FEMA share its algorithm with the American people? Kennedy asked. Maurstad responded that the agency had “highlighted, on our website, the methodology” behind Risk Rating 2.0, which Kennedy disputed.

“I want the algorithm so I can hire someone to look at that algorithm to see what the clairvoyants are telling us about climate change and what’s going to happen in America over the next 150 years,” Kennedy said.

Sen. Mark Warner, D-Va., also echoed his constituents’ complaints about the 2.0 risk rating, telling Maurstad that he had “heard from many communities and real individual owners [that] this new system actually makes it more difficult for the individual owner to be able to calculate what their risk might be.

Maurstaud claimed the new system was “less complex than before”. Warner replied, “Well, I just have to tell you that I hope it is.”

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