Alexander: “Assess Your Flood Risk Today”

June 9, 2010

THOUGHTS FROM CAPITOL HILL

WASHINGTON, D.C. – This year, countless home and business owners have contacted me to voice their concerns regarding the Federal Emergency Management Agency’s (FEMA) remapping process. They have good reason to be concerned given that many businesses and families stand to be negatively impacted when the new maps are implemented.

I have been working diligently to preserve the nation’s levee systems and defend those individuals whom levees guard. Rest assured, I will continue this fight as long as property owners are at risk of dangerous flood waters and costly flood insurance mandates. In addition, I want to keep residents of the 5th District informed about FEMA’s remapping process and its potential consequences.

Recently, FEMA announced that they are extending Preferred Risk Policy (PRP) flood insurance rates to two years from the date the new maps go into effect. According to FEMA’s acting federal insurance and mitigation administrator, Edward Connor, “The two years will provide owners extra time to understand their flood risk and to consider this risk in their preparedness planning.”

Though FEMA’s announcement may appear to be a move the right direction, it is laden with potentially harmful financial implications. Before our residents breathe a sigh of relief, they need to know what’s really in store.

Once the new flood maps are employed, everyone declared to be in a Special Flood Hazard Area (SFHA) will be required to purchase flood insurance immediately—not in a year or two, but immediately. You should know, however, that if you purchase flood insurance before the new maps go into effect, you will be “grandfathered in,” meaning that you should be able to keep relatively reasonable rates through the following two years and beyond. On the other hand, if you do not purchase flood insurance before the maps go into effect, and you are then declared to be in a SFHA, you will be required to purchase flood insurance at the PRP rates—that is, the lowest rates. But, after the two year period has lapsed, your rates will be raised to the standard rates—that is, the extremely high rates. Because there are certain restrictions on who is eligible to purchase insurance at the PRP rates, not everyone applies.

In essence, FEMA’s new two-year policy is similar to a sub-prime, adjustable rate mortgage: You will briefly get a teaser rate before it balloons into a rate substantially more expensive. While it may initially sound like a significant step in alleviating the likely financial pain our residents will face, it does little to correct any of the underlying problems. This policy simply offers discount coupons on flood insurance that may not be truly necessary to purchase in the first place.

Although FEMA’s Edward Connor says that during the two years the PRP rates are available property owners will have time to comprehend their flood risk, I believe that waiting until then is a mistake. The opportune time to consider your risk is now—not after the maps and insurance mandates go into effect. I strongly encourage residents to contact your local insurance agent to discuss options and determine the most effective and cost-efficient route.

Louisiana residents are not the only ones who will be affected by FEMA’s remapping process. For this reason, support and focus is needed in the halls of Capitol Hill in addition to the parishes in the Pelican State. I have worked to raise awareness amongst my congressional colleagues, many of whom were unaware how much their own constituents would be affected by FEMA’s remapping. I have founded and currently serve as co-chairman of the Congressional Levee Caucus, which now has 18 Members of Congress and counting. Also, I have sent a personal letter to President Obama asking him to recognize and address this nationwide problem.

Unfortunately, FEMA is intent on pressing forward with their remapping, and they have been undeterred by the persistence of me as well as my fellow colleagues to delay them. I will continue to do everything within my power to slow the remapping process, but as this fight goes on, I strongly urge you to study this important issue and determine what will be best for you and your family.

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