What's the future of flood insurance? - KPLC 7 News, Lake Charles, Louisiana

What's the future of flood insurance?

U.S. Capitol (Source: Google) U.S. Capitol (Source: Google)
LAKE CHARLES, LA (KPLC) -

On Capitol Hill there's serious talk of major changes to the National Flood Insurance Program.

This of course comes after a $16 billion bailout was needed to help pay claims from the 2017 hurricane season.

The House passed a bill Tuesday that will increase flood insurance costs for many high-risk property owners, while cutting costs for others. It’s also said to help sustain the National Flood Insurance Program.

Lawmakers have been trying to formulate an overhaul of the National Flood Insurance Program, or NFIP, for years.

“In the aftermath of what just took place in Texas and Florida, the program is in worse financial shape than ever, but it is vital to the economy of Louisiana,” said Jim Donelon, Louisiana's insurance commissioner.

In the aftermath of Harvey and Irma, Donelon says there's more pressure than ever to create a self-sustaining program that cuts down on government involvement by inviting the private sector in to compete with NFIP rates.

“The Louisiana delegation is carefully trying to gather enough support of the reauthorization, without conceding to provisions that make it an impractical program for our coastal parishes,” said Donelon.

He says in a recent study 56 percent of the nation's flood insurance policy holders are in Louisiana, Texas and Florida.

70 percent of those policyholders, Donelon says, would get better coverage at cheaper rates if the private sector option were available, but 20 percent located in the vulnerable coastal parts of our state would find their premiums twice as expensive.

“It's great to get 70 percent of the policies out of the program and get the government off the hook for those policies,” said Donelon. “The problem is what happens to that 20 percent that can't get affordable coverage in the private sector - and that residual federal program would have a much smaller base to spread those bad risk properties going forward.”

So the federal program would only have to pick up those high-risk properties, instead of everyone.

With a bill passed in the House, there's still work to be done by the Senate, working to draft up their own bill. 

Copyright 2017 KPLC. All rights reserved. 

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