CHARLESTON, W.Va. — A bill that would let private insurers sell flood insurance to homeowners in West Virginia could advance out of the Senate before the end of the week.
“It’s worth a try,” said Senator Rocky Fitzsimmons (D-Ohio, 1). “We can’t sit back and wait while the federal government tries to fix this problem, so I thought this was a proactive step to try to alleviate it in the interim.”
The bill is a response to the Biggert-Waters Flood Insurance Reform Act of 2012 which makes a number of changes to the National Flood Insurance Program or NFIP — including increasing flood insurance premiums so the rates people pay more accurately reflect their risks.
Since 1968, taxpayers have been subsidizing the NFIP to protect people who live in flood plains inland and those subsidies have also been used for vacation homes in coastal locations and other areas with increased flooding risks.
Because of actuarial discrepancies and storms like Hurricane Katrina, the debt for NFIP now stands at an estimated $24 billion.
To make the federal program more financially stable, many of the discounts and subsidies policyholders have received in the past, including those for second homes, are in the process of being eliminated.
Additionally, the flood-zone map is being revised.
As a result, many West Virginians are seeing their premiums jump by as much as six times, find themselves in flood plains that did not previously exist, or are stuck with homes they cannot sell because of the flood insurance requirements that come with federally insured home loans.
Fitzsimmons envisions a competitive environment with private insurers in the mix, along with the government-established program, to give people different, more affordable options for flood insurance.
“This would create a mechanism whereby the Insurance Commissioner would be able to regulate set rates for private flood insurance,” he said.
The bill, SB 621, was scheduled to be taken up on second reading in the Senate, meaning possible amendments, on Thursday. A final Senate vote could happen by Friday.
Fitzsimmons was a guest on Wednesday’s MetroNews “Talkline.”