With the National Flood Insurance Program paying out an estimated $700 million in insurance claims and relief to flood-damaged homes this year,two legislators are trying once again to limit repeat claims.
The new bill targets 45,000 homes nationwide that the NFIP has identified as suffering two or more floods,costing at least $1,000 each time,over a 10-year period,said Mark Stevens,NFIP public affairs officer.
“Of the $700 million the NFIP has paid out this year in flood insurance claims,$200 million is going to these repetitive flood loss properties,with $80 million going to the worst category of these types,” NFIP public affairs office Mark Stevens said. “That's a pretty disproportionate figure when you're talking claims.”
Policy analysts for the Nation Association of Realtors,Russell Riggs,said the bill would limit waste for the Federal Emergency Management Agency. “FEMA won't be paying people who have a house worth $100,000,$800,000 because they've had 15 floods,” Riggs said.
The Two Floods and You're Out of the Taxpayer's Pocket Act,cosponsored by Rep. Doug Bereuter (R-Nebraska) and Rep. Earl Blumenauer (D-Oregon),proposes alternative methods for owners paying flood insurance on properties more susceptible to flood damage.
Bereuter's press secretary,Carol Lawrence,said the congressman hopes the bill will pass under the Bush administration,after being defeated in August 1999.
The proposed bill offers three options to owners covered by the NFIP. The first is to help homeowners prevent damage with flood mitigation measures such as elevation projects.
“These kind of measures would be putting a house on stilts or raising it,changing the landscape or other ways to proof the house from the danger of a flood,” Riggs said.
The second option is to offer buyouts to flood-damaged properties. Riggs said the idea might work for hazardous properties,but he's concerned with how NFIP will appraise the houses.
“We want to know how they'll determine the fair market value and whether or not homeowners are getting enough so that they can move,” Riggs said. “Also,after NFIP buys the property,there's the concern of how they plan to maintain the area so that it doesn't bring down the value appreciation of adjacent homes.”
Stevens said NFIP uses a pre-flood fair market value rather than an appraised value when buying homes,and buyouts are administered through the state government,with FEMA providing 75 percent of the finances.
The third option would be for owners to pay the highest actuarial-based insurance rates.
Rates for an owner of an at-risk house valued at $71,000 and paying $230 yearly in flood insurance would increase to $1,300,said Tom Markgraf,press secretary for Blumenauer.
“This really affects the 2 percent of insurance payers who account for 40 percent of the federal flood insurance,” Markgraf said. “You're not automatically out of the loop if you have two consecutive floods.”
Markgraf cited a house valued at $114,000 in Houston,Texas,which had been rebuilt 16 times in 18 years due to flood damages,at a total cost of $860,000 in payments from the NFIP.
“It would have been a whole lot cheaper,and a whole lot drier,to buy the house from the people and move them to higher ground,” Markgraf said.
Most of the properties in question were built before building regulations were set in the late 60s,Riggs said.
Stevens said every major flood or storm would likely push a few more properties onto the list of repeaters,but he expects the number will reduce eventually.
“We're already seeing a decrease because older properties are being rebuilt under current ordinances and regulations,” he said. “They aren't being grandfathered in.”