WASHINGTON -- In an effort to prevent people from being priced out of their homes, the House bill trims premiums for the national flood insurance program by capping annual increases.
And when someone buys the property, rates are grandfathered so the new owner isn't slammed with unaffordable rates.
“This is great for Louisiana, but it's great for the United States,” said Rep. Bill Cassidy, R-La.
Cassidy said 500,000 policy holders in Louisiana alone will benefit.
By assessing a $25 annual fee on policy holders, he said the House bill would stabilize the National Flood Insurance Program, which now has a debt of $24 billion.
“That $25 only on folks in the flood insurance program goes toward reserve funds, so if there's a future disaster, there's money in that fund, to pay for the damage the disaster causes,” Cassidy said.
Cassidy said the bill will stabilize communities. As an example, he cites the case of a woman with a house worth $180,000 who was going to be hit with a $20,000 annual premium, even though she had never flooded.
“We are going to take homeowners like that, give them certainty to those who may purchase those homes in the future,” Cassidy said.
Sen. Mary Landrieu, D-La., said the key victory is “getting affordability back into the National Flood Insurance Program.”
Landrieu said the bill isn’t perfect. She would have preferred a lower cap on annual premium increases.
“We would have loved it to be less than 18 percent,” she said. “But that’s the best we could negotiate. With the House leadership, 18 percent annual cap.”
Still, Landrieu calls it a step in the right direction.