Peggy Molloy was elated.
"It means I get to keep my house," the Point Pleasant woman said
Monday after a bill scaling back huge premium increases faced by more
than 243,000 New Jersey homeowners in flood-prone areas cleared
Congress.
The legislation, reversing reforms of the federally subsidized flood
insurance program, is expected to be signed by President Obama.
First introduced by Sen. Robert Menendez (D-N.J.), the proposal rolls
back changes in the National Flood Insurance Program that were
implemented in 2012 — just before Hurricane Sandy struck — and meant to
make the program more financially stable. The reforms, which called for
rates reflecting true flood risk, have led to huge premium increases for
policyholders who complain they could be forced out of their homes.
The bill now on the president’s desk would cap annual rate increases
and repeal provisions that eliminated any subsidy for flood insurance on
existing properties for homebuyers at the time of sale.
Menendez, who introduced the measure in October on the one-year
anniversary of Sandy, said the intended reforms brought unintended
consequences and would have "crushed thousands of families under the
weight of skyrocketing flood insurance rates."
George
Kasimos, an organizer of Stop FEMA Now, said the insurance premium
rollbacks will buy time, and will keep some out of foreclosure.
Among them was George Kasimos, whose Toms River home was damaged by
Sandy. He said he will now see his flood insurance rates rise by $1,500
instead of $9,000.
"It gives us some breathing room," said Kasimos, who founded the
group Stop FEMA Now to protest the federal government’s response to the
storm and has been helping lead the charge against the flood insurance
hikes.
The legislation caps annual rate increases at an average of 15
percent, with a maximum of 18 percent for primary homeowners. Secondary
homeowners can still see their premiums rise by 25 percent a year.
Because his home was damaged by the storm, Kasimos said his rates
will go up $500 a year, but said that is better than the huge increase
he was facing next year, had Congress not acted.
"It’s great we passed the bill," Kasimos said. But rates will
continue to go up over time. "It’s a good start. It will delay
foreclosure for some people."
Molloy, who worried the cost of flood insurance on her home in Point
Pleasant would skyrocket from $800 to as much as $10,000 to $14,000, was
relieved at the rollback.
"I could not afford the new insurance premiums and my house would
have been unsellable," she said. "It means I don’t have to walk away.
It’s a huge relief."
Menendez said the expected flood insurance
increases, due to take effect next year, would have further threatened
the state’s recovery from Sandy and jeopardized the financial security
of thousands of residents.
It gives us some breathing room..."
"Residents had come to me in tears, saying they were afraid they’d lose their homes," Menendez said.
A spokesman for Gov. Chris Christie said the administration was still
looking at the final version of the bill, which was approved 306-91
last week in the House, and passed 72-22 late Thursday in the Senate.
The the governor had urged congressional leaders to delay the
insurance premium increases — noting that the devastating impacts of
Hurricane Sandy were "simply unknown" when the flood reforms were
passed.
Still, some criticized the undoing of changes in the National Flood
Insurance Program, which was hard hit by storms such as Sandy and
Hurricane Katrina. The National Association of Mutual Insurance
Companies called it a move down the wrong path.
"It forces the vast majority of flood insurance policyholders to pay a
little more so that those with subsidized rates can continue to pay
less than what they should, whether they need assistance or not, and it
wipes out important reforms that would ensure that the National Flood
Insurance Program will be able to pay claims from future storms without a
taxpayer-funded bailout," said Jimi Grande, senior vice president of
federal and political affairs for NAMIC.
Environmentalists also questioned the continued subsidy for those living on the Jersey Shore at the expense of other taxpayers.
"What we’re doing is putting more people in harm’s way and
subsidizing their insurance," said Jeff Tittel, director of the New
Jersey chapter of the Sierra Club.
Tittel said a delay in the planned premium increases would make sense
if the plan was to buy time to figure out what to do about the coast —
including rules on elevating structures, remapping flood zones, and
homeowner buyouts.
"But we’re not doing that," he said. "I understand people living on the coast don’t want the shock. Nobody does.
"But should someone in Newark subsidize those living on the shore?"
