NYC's Mayor Seeks Delay in Flood Insurance Reforms
Mayor Bloomberg released a RAND Corporation study Oct. 25 that showed new FEMA flood maps will put thousands of additional properties in the floodplain, causing owners’ insurance premiums to soar.
New York City Mayor Michael Bloomberg and Deputy Mayor for Operations Cas Holloway said Oct. 25 they will urge Congress and FEMA to delay the implementation of some provisions in the new National Flood Insurance Program until they can ensure flood insurance stays affordable for low- and middle-income families. They released a RAND Corporation study showing that 35 percent of property owners in the floodplain who are required to carry flood insurance today do not have it, and new FEMA flood maps that will be adopted shortly will place 32,000 more properties in the floodplain, raising owners’ insurance premiums from an average of $430 to $5,000 to $10,000 per year.
RAND and the city official say steps that could be taken to provide some relief from these premium increases including flood mitigation measures and high-deductible policies. "For thousands of New Yorkers, the difference in the cost of insurance as a result of federal policy changes is the difference between being able to stay in their neighborhoods and having to move," said Bloomberg. "We will continue to lobby the federal government to implement solutions to help New York City residents mitigate the significant rise in their flood insurance costs and help New Yorkers damaged by Hurricane Sandy to recover and rebuild."
"Adopting a risk-based premium structure for the National Flood Insurance Program is the right approach," Holloway said, "but it has to be done in a way that is affordable and encourages homeowners to take common-sense measures to protect against flooding and other climate impacts. Congress required that affordability be addressed before the new flood insurance rules took effect, and that has not happened. Doing so now must be a national priority."
Bloomberg is asking for delays in the reforms in the Biggert-Waters Flood Insurance Reform Act of 2012 until FEMA completes an affordability study is that has been delayed. The reforms were designed to phase out subsidies and grandfathering, which allowed homeowners to insure their homes at rates corresponding to previous flood maps.
"Hurricane Sandy exposed serious gaps in the public and private flood insurance markets in New York City," said Lloyd Dixon, lead author of the report and director of the RAND Center for Catastrophic Risk Management and Compensation. "Residents and businesses will be facing higher premiums as the impacts of new, more accurate flood maps and reforms to the National Flood Insurance Program begin to take hold."