EDITORIAL: Congress must find a balance on flood insurance

Congress had good intentions when it passed legislation in July 2012 to reduce federal liabilities for subsidized flood insurance. The Biggert-Waters Flood Insurance Reform Act was aimed at shrinking the $20 billion in debt the federal government assumed after Hurricane Katrina in 2005. That debt increased in 2012 when Hurricane Sandy smashed into the Northeast.

There's little doubt that reform is needed of a flood insurance program created in 1968. Subsidized insurance has encouraged developers and property owners to build in the wrong places, and it has done little to encourage them to take measures to limit damage from floods and hurricanes.

Yet it's also clear that Biggert-Waters moves too quickly in reducing federal liability and transferring it to individual property owners. With the law taking effect Oct. 1, homeowners have become alarmed by dramatically higher premiums and uncertainty about which areas will be affected.

U.S. Rep. Maxine Waters, a Los Angeles Democrat who co-authored the law, released a statement saying she is "outraged by the increased costs of flood insurance premiums that have resulted from the Biggert-Waters Act." Mississippi has sued the federal government. U.S. Rep. John Garamendi, a former California insurance commissioner, said "the new flood insurance rates demanded by FEMA are absolutely unaffordable.'

On his website, Garamendi has a chart, prepared by the Dewberry firm, showing the impact of higher premiums on houses in different locales. A $200,000 house 1 foot below the "base flood elevation" could see insurance rates rise from $2,235 to $5,623 yearly. The same house 10 feet below base flood elevation could see rates rise from $2,235 to $25,000 annually.

Garamendi and 31 others in the House are co-sponsoring the bipartisan HR 2199, the Flood Insurance Implementation Reform Act of 2013, which would delay the rate hike. That may be a needed move, but it hardly resolves the question of how to reduce federal liabilities over the long term.

In the meantime, residents in the low-lying parts of the Central Valley should prepare themselves. One way or another, insurance rates will rise. The question is, how high -- and how fast -- will they rise?