NEW ORLEANS, LA (WVUE) - Flood insurance is important to many people in southeast Louisiana and on Capitol Hill efforts are underway to reauthorize and reform the National Flood Insurance Program and a representative of Greater New Orleans Inc., testified before the House Committee on Financial services Wednesday on draft proposals recently released.
"We urge congress not to increase rates or surcharges in this re-authorization," said Caitlin Berni, Vice President of Policy and Communications for Greater New Orleans, Inc., as she testified Wednesday before the House Financial Services Committee.
The flood insurance program expires in September and GNO Inc., as it is commonly called, spearheads the Coalition for Sustainable Flood Insurance which involves a national alliance.
"Because pretty much if you're in south Louisiana you need it. You'd be a fool not to have it," said Metairie homeowner Tim Molbert.
He thinks flood coverage is a necessity.
"If you don't have it then you're going to flood sometime or another and insurance is going to help you get through it," said Molbert.
Berni said mitigation, mapping, affordability, and program participation are major concerns for the coalition.
"Encouraging people to buy more flood insurance both brings revenues in line with costs and will provide for greater protections for the taxpayer down the line as well," said Berni.
The flood insurance program remains billions in debt and participation lags nationwide.
As FOX 8 News showed in a special report in May with the help of reams of FEMA data and information from local governments fewer flood policies were in force in Orleans, Jefferson, St. Bernard and St. Tammany Parishes at the end of 2016 than in 2007 when the population was less as the area was still recovering from the devastation wrought by Hurricane Katrina.
The draft proposals for reforming the NFIP include reauthorizing the program for five years and limiting annual premium increases by decreasing from 18 to 15 percent the cap on annual rate increases; limiting the chargeable risk premium of single family residential property to 10,000 annually and increase the minimum average chargeable risk premium in a single risk classification from five percent to eight percent.
"Our coalition is concerned that increasing the floor of rate increases from five percent to eight percent will have a detrimental effect on premium affordability, while the bill does propose to lower the overall premium cap from 18-percent to 15-percent increasing the floor will negatively impact many more policy holders than lowering the ceiling will help especially when considering that premiums are increasing an average of 6.3 percent this year," said Berni.
The draft proposal allow would allow for the acceptance of community flood maps. Flawed maps have been a problem in this area.
"The current map process often results in communities having to fight inaccurate maps that do not take into account locally built flood protection features which result in artificially inflated risks," Berni stated.
Another proposal would establish a greater private insurance market for flood coverage, but some democrats pushed back.
"The private insurers for example, I recall they left the market following Katrina and I guess every disaster but I remember Katrina very vividly because of I was in Mississippi and New Orleans," said Rep. Maxine Waters, D-California.
GNO Inc., also thinks it is important to keep the "grandfather" provision in place for homeowners who played by the rules.
"We believe this policy should be maintained so that anybody who did as they were told and followed the advice of the federal government and built according to strong standards as FEMA sets out in their maps should be provided with protection," said Berni.
But Rep. Sean Duffy, R-Wisconsin, seemed to take issue with that.
"Is it only poor people who own grandfathered homes, are their poor people, medium wealth people and wealthy people who have properties that are grandfathered?" Rep. Duffy said.
"So we would define grandfathering as any property that was built to code at the time of construction, then when a new map is introduced in their community that property would be able to retain credit for building according to code," answered Berni.
"If they've built up I think they should be," said Molbert.
Later on Wednesday, Sen. Bill Cassidy, R-Louisiana, announced that he and Senators Kristen Gillibrand, D-NY, and Shelley Moore Capito, R-WV introduced legislation to reauthorize the NFIP for 10 years. It also would reform the program.
GNO Inc., said Wednesday afternoon that it likes Cassidy's legislation.