Harvey puts strain on federal flood insurance program that leave - Spokane, North Idaho News & Weather KHQ.com

Harvey puts strain on federal flood insurance program that leaves taxpayers on hook for $24.6 billion

Posted: Updated:
An estimated 30,000 to 40,000 homes have been destroyed in the Houston area by Harvey. An estimated 30,000 to 40,000 homes have been destroyed in the Houston area by Harvey.

WASHINGTON (AP) - The massive flooding Harvey has caused in Texas and Louisiana comes as Congress weighs renewing a federal flood insurance program that continually pays out more than it takes in through premiums, potentially leaving taxpayers on the hook for $24.6 billion and counting.
    
The National Flood Insurance Program expires Sept. 30. Congress is likely to reauthorize the program before then because failure to do so would disrupt coastal real estate markets. If the program expires, current policies would remain in effect, but no new policies could be issued.
    
The question for lawmakers when they return from the August recess next week is whether to pass a short-term extension that keeps the program running largely as is for the next few months or pass a long-term extension that makes more drastic changes and puts the program on firmer financial footing.
    
Here's a look at the program and how some lawmakers are looking to change it.
    
___
    
HOW DID THE PROGRAM START?
    
Congress created the National Flood Insurance Program in 1968 to reduce the growing expense the federal government assumed after natural disasters to help repair damaged homes and businesses.
    
One of the key goals of the program was to get cities and counties to reduce the risk of flooding and better protect buildings from flood waters.
    
If the communities agree to undertake such steps and join the program, their residents and businesses can then purchase federal flood insurance to protect themselves from losses. When communities don't participate, it means their residents and business owners cannot buy federal flood insurance and are thus ineligible for a federally backed loan.
    
___
    
WHO GETS COVERAGE THROUGH THE NATIONAL FLOOD INSURANCE PROGRAM?
    
Homeowners who live in areas that have a 1 percent chance of being inundated by flood waters in any given year must purchase flood insurance as a condition of having a federally backed mortgage.
    
About 5 million policies are in effect for individuals and businesses. The policies generate about $3.3 billion in premiums annually. Still, studies have shown that many Americans living in these particularly vulnerable flood zones bypass the requirement to buy flood insurance. A 2006 government study found that compliance was lowest in the Midwest and highest in the West.
    
___
    
WHERE IS THE PROGRAM WORKING WELL?
    
The Federal Emergency Management Agency estimates that the flood-control efforts communities have undertaken as a result of their participation in the program prevents nearly $1.9 billion in flood losses annually.
    
___
    
WHERE IS THE PROGRAM NOT WORKING?
    
A program that is supposed to pay for itself is clearly not doing so. A spending bill enacted after Superstorm Sandy authorized the program to borrow up to $30.4 billion. The damage from Harvey will potentially lead FEMA to hit that borrowing level. If it does, FEMA would eventually need authorization from Congress before borrowing any more money to pay out claims.
    
The growing debt level is why lawmakers such as Rep. Jeb Hensarling, the Republican chairman of the House Financial Services Committee, say the program is unsustainable. Hensarling calls Harvey a "wake-up call" that an overhaul is needed to stave off a taxpayer bailout.
    
Still, it's a difficult balance. If premiums rise too much to make the program self-sustainable, it discourages people from living and opening businesses in the more flood-prone regions of the country.
    
___
    
WHAT CHANGES ARE BEING CONSIDERED BY CONGRESS?
    
Hensarling's committee has already passed a series of bills that would increase premiums by 8 percent annually for certain policies instead of the current 5 percent, among other changes.
    
The panel has since reined that in to a 6.5 percent increase, a move that helped attract support from influential trade groups representing home builders and real estate agents. The House legislation would require FEMA to raise collection rates for a reserve fund by 1 percent each year to help pay future claims. The legislation also seeks to boost the private flood insurance marketplace, clarifying that flood insurance policies written by private carriers satisfy the mandatory purchase requirements that come with obtaining a federally-backed mortgage. Hensarling said he believes more flood insurance offerings from private companies would bring about the kind of competition that could make policies more affordable.
    
The top Democrat on the committee, California Rep. Maxine Waters, said that the fee and premium increases being pursued were still too much in her view and she encouraged House colleagues to "consider the thoughtful, bipartisan process in the Senate as an alternative to this anti-homeowner bill."
    
There are competing bills in the Senate, with one bipartisan measure capping premium fee increases at 10 percent.

(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
 

  • Most Popular StoriesMost Popular StoriesMore>>

  • Police impersonator attempts to pull over Spokane woman

    Police impersonator attempts to pull over Spokane woman

    Monday, September 17 2018 8:45 PM EDT2018-09-18 00:45:37 GMT

    SPOKANE, Wash. - "He told me to pull over, and my jaw just dropped," a Spokane woman, who says a fake police officer tried to pull her over, doesn't want to be named. In fear, this could happen again. "It really scared me and kind of threw me off that night. I don't even want to drive by myself anymore," she said. She tells me that she was driving around North Spokane at night on her way home from work. 

    >>

    SPOKANE, Wash. - "He told me to pull over, and my jaw just dropped," a Spokane woman, who says a fake police officer tried to pull her over, doesn't want to be named. In fear, this could happen again. "It really scared me and kind of threw me off that night. I don't even want to drive by myself anymore," she said. She tells me that she was driving around North Spokane at night on her way home from work. 

    >>
  • Report: Olympia woman refuses to pull over for WSP trooper because she drives a Prius

    Report: Olympia woman refuses to pull over for WSP trooper because she drives a Prius

    Monday, September 17 2018 1:45 PM EDT2018-09-17 17:45:44 GMT

    MARYSVILLE, Wash. - An Olympia woman wouldn't pull over for a Washington State Patrol trooper because she drives a Prius, according to an arrest report.

    >>

    MARYSVILLE, Wash. - An Olympia woman wouldn't pull over for a Washington State Patrol trooper because she drives a Prius, according to an arrest report.

    >>
  • Police: Man killed by Cheney officers planned death

    Police: Man killed by Cheney officers planned death

    Tuesday, September 18 2018 1:27 AM EDT2018-09-18 05:27:11 GMT

    SPOKANE, Wash. (AP) - Court documents indicate that a man who was killed by Cheney police officers earlier this month had reported himself to police the evening of the shooting. The Spokesman-Review reports 40-year-old Steve Anderson was shot by three officers in a grocery store parking lot after police say he was wielding a knife and moved toward officers. 

    >>

    SPOKANE, Wash. (AP) - Court documents indicate that a man who was killed by Cheney police officers earlier this month had reported himself to police the evening of the shooting. The Spokesman-Review reports 40-year-old Steve Anderson was shot by three officers in a grocery store parking lot after police say he was wielding a knife and moved toward officers. 

    >>
HD DOPPLER 6i
/
  • Top Stories from KHQHomeMore>>

  • State marksman kills wolf from pack in northeast Washington

    State marksman kills wolf from pack in northeast Washington

    Tuesday, September 18 2018 5:31 PM EDT2018-09-18 21:31:32 GMT
    One wolf killed so farOne wolf killed so far

    OLYMPIA, Wash. - A marksman with Washington state has shot and killed a young member of a wolf pack that was targeted because it attacked cattle in northeast Washington.    The state Department of Fish and Wildlife said Tuesday that a wolf from the so-called Old Profanity Territory was shot from a helicopter Sunday.

    >>

    OLYMPIA, Wash. - A marksman with Washington state has shot and killed a young member of a wolf pack that was targeted because it attacked cattle in northeast Washington.    The state Department of Fish and Wildlife said Tuesday that a wolf from the so-called Old Profanity Territory was shot from a helicopter Sunday.

    >>
  • Improperly discarded cigarette caused fatal Spokane apartment fire

    Improperly discarded cigarette caused fatal Spokane apartment fire

    Tuesday, September 18 2018 5:26 PM EDT2018-09-18 21:26:21 GMT

    SPOKANE, Wash. - Investigators with the Spokane Fire Department say improperly discarded smoking materials caused last week's fatal apartment fire. Just after 1 a.m. on Friday, September 14, the Spokane Fire Department responded to the 4100 block of N. Cook St. and found flames coming from a second story window.

    >>

    SPOKANE, Wash. - Investigators with the Spokane Fire Department say improperly discarded smoking materials caused last week's fatal apartment fire. Just after 1 a.m. on Friday, September 14, the Spokane Fire Department responded to the 4100 block of N. Cook St. and found flames coming from a second story window.

    >>
  • Spokane looking for woman who used stolen debit card

    Spokane looking for woman who used stolen debit card

    Tuesday, September 18 2018 5:17 PM EDT2018-09-18 21:17:46 GMT

    SPOKANE, Wash. - The Spokane Police Department is asking for the public's help to identify a woman involved in an attempted forgery. The woman is believed to have tried to use the victim's debit card in late June after a burglary at the victim's home. Just after 5 a.m. on June 29, officers responded to a house in the 100 block of east Wedgewood for a report of a burglary.

    >>

    SPOKANE, Wash. - The Spokane Police Department is asking for the public's help to identify a woman involved in an attempted forgery. The woman is believed to have tried to use the victim's debit card in late June after a burglary at the victim's home. Just after 5 a.m. on June 29, officers responded to a house in the 100 block of east Wedgewood for a report of a burglary.

    >>