Flood Insurance: Rate Increase Relief Coming

Rep. Michael G. Grimm (R-NY) spoke to Midland Beach
residents last addressing their concerns about recovery.
(Photo: Mark E. Ruquet)  

By Mark E. Ruquet

Staten Island Congressman Michael G. Grimm (R-NY) says he is hopeful that homeowners facing crushing increases from their flood insurance renewal premiums will get relief by the end of the year if a bi-partisan effort is successful at getting a bill on the president’s desk.

Grimm spoke to residents in Midland Beach, Staten Island, N.Y., last night to explain why homeowners, a year after struggling to recover from the devastation inflicted upon them from Superstorm Sandy, now face staggering premium renewal rates for flood insurance and what some members of Congress are doing to address the issue.

“Some of the increases are so astronomical that you could never afford them,” Grimm said, adding, “It is happening all over the country.”

To combat the increases, Grimm said he is reaching across the aisle to Democrats to work-up a bill that will suspend the increases for two to three years. In the interim, the Federal Emergency Management Agency will need to complete an affordability study to determine rates that will not bankrupt homeowners or force them to walk away from their homes. The delay would also give homeowners time to determine their options and perform necessary remediation work aimed at lowering flood insurance rate increases.

“People will walk away and that will create all types of problems,” said Grimm echoing resident’s arguments that if flood insurance becomes unaffordable it will ruin neighborhoods and potentially create pockets of decay where homes are abandoned because the increases made it impossible to live there or to sell the house.

Under the Biggert-Waters Flood Insurance Reform Act, flood insurance premiums are to rise to reflect actual insurance market rates. Congress felt the government should no longer subsidize the program and property owners should pay the close to $24 billion deficit in the program primarily caused by losses from Hurricane Katrina, Rita and Wilma in 2005 and Sandy last year.

Grimm said that before the rate increases were to go into effect FEMA was to perform an affordability study and finalize the flood maps—which it has not done.

FEMA Director Craig Fugate testified before the Senate Committee on Banking in September and told members that the law has him boxed in and he can do nothing about the increases without the help of Congress.

Despite the rancor and partisan divisions in Congress, Grimm sounded optimistic that Congress will pass a bill by December and he was confident President Barack Obama would sign it into law. He emphasized that he is willing to work with anyone from any party to defend the interests of his constituents—noting his willingness to buck his party when he angered the House leadership by chastising members for delaying aid for Sandy victims.

While he works on the bill, Grimm urged those homeowners who do receive premium increases “not to push the panic button” and contact his office. He made no promises about what his staff would do, but he said, “We have been able to move mountains.”

Grimm also touched on funding of New York City’s Build it Back program, saying there are ongoing discussions between him, city officials and Department of Housing and Urban Development Secretary Shaun Donovan over who will have priority to receive funding. Grimm said he is pushing for the money to go initially to those still waiting for permanent housing, while the city wants to distribute the money by income level.  

“We are trying to adjust some of their priorities,” said Grimm.

The disaster relief has also uncovered what Grimm feels is serious dysfunction at the Small Business Administration that he feels has been less than helpful to recovery efforts. He said the department is “the most broken” piece of the recovery system and the government “needs to redo the whole department.” That effort will have to wait.

“It is bigger than me right now,” said Grimm.

Grimm said he is pledging to see the recovery through to the end, whether voters send him back to Congress or not, saying he will work “to the best of my abilities to get this done.”