By Julia Arenstam Staff Writer
The National Flood Insurance Program is in jeopardy.
That’s what state Rep. Jerome Zeringue, R-Houma, said today during a Houma-Terrebonne Chamber of Commerce Luncheon.
As the executive director of the new Louisiana Flood Risk Coalition, Zeringue spoke to chamber members about the problems facing the program and how the coalition plans to address them.
One of the first objectives is to increase participation, he said.
Although purchasing flood insurance through NFIP has been mandatory for those with federally-backed loans since 1973, the Federal Emergency Management Agency, which administers the program, estimates that there is 33 to 55 percent participation nationwide, Zeringue said.
Louisiana fares much better, with 80 percent of its residents of high-flood-risk areas participating, he said.
The coalition is also seeking affordability, administrative cost reductions and flood prevention.
“The government keeps changing the goal line,” said Zeringue, who was elected to the state House of Representatives. “The people shouldn’t be penalized for the past poor performance of the government.”
Flood zone maps are redrawn every 10 years, creating new standards and regulations that are difficult for homeowners to meet, he said.
Increasing revenue through participation and reducing the cost of government operations is also a key factor in the debate, Zeringue said.
The introduction of private companies into the market only creates a cherry-picking situation, where only the lowest-risk buyers are granted insurance, he said. Meanwhile, buyers in higher-risk areas such as south Louisiana, will be left with higher rates, Zeringue said.
An analysis of the program’s income and expenses shows that, excluding 100-year events such as Hurricanes Katrina or Sandy, the program takes in more money in premiums than it pays out in claims, he said.
“The program was never set up to cover the cost of major events,” Zeringue said.
Problems occur because of a failure to implement proper flood protection systems, such as levees, that lessen the likelihood of flooding.
Terrebonne Parish has proven to be one of the most active places in the nation when it comes to risk reduction, Zeringue said.
But true reform needs to go beyond elevating homes and, in extreme cases, relocating communities, he said.
The Government Accountability Office released a report that claims every dollar spent on mitigation generates $4 in savings during flood relief.
Zeringue stressed that flooding isn’t an issue that is unique to coastal areas, but that it affects the entire country. He presented a map of areas that have experienced significant flooding events in recent years.
Increasing accountability and policing of homeowners who drop out or don’t participate in the insurance program should also result in penalties, he said.
The program is scheduled for renewal from Congress this year, but it has been deferred as part of the larger federal budget until March 23.
Eventually, there will most likely be another temporary extension, Zeringue said.
If not, a government shutdown could create a disruption in the flood insurance program and could cause havoc in the real estate market.