PASADENA ROTARY WARNED OF IMPENDING RATE INCREASES IN FLOOD INSURANCE

Article and photo by Bill Welch

With the sound of rain gently falling on the roof of First United Methodist Church, Pasadena Rotarians heard a disturbing message about significant rate increases in our flood insurance premiums.  Guest speaker David Braun, flanked (L) by President Dana Philibert and (R) by Rotarian Judge Holly Williamson, is the marketing manager-Aerospace Bay Area Houston Economic Partnership.  Prompted by a FEMA claim that they have a $25 Billion dollars deficit, the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) was passed with its proposed effective date of implication October 1, 2013.  The key provisions of BW-12 are to raise rates to reflect true flood risk and to raise the BFE, Base Flood Elevation from 14 feet to 17 feet, with compliance mandatory for new buildings if the builder wants to be able to purchase flood insurance.  The BFE increase will put many homes in a new (and more expensive) flood plain.  ‘i.e.’ homes previously in the 500 year Flood Plain may find themselves in the 100 year Flood Plain.  The increased cost of Flood Insurance will make new homes more expensive and used homes more difficult to sell resulting in increased mortgage defaults, vacant homes, lowered ad valium taxes, reduction of city services and increase of urban blight.

One of the few bright spots of Mr. Braun’s presentation was that a group, with a large Harris County representation, called the Coalition for Sustainable Flood Insurance (CSFI) is working to oppose this radical escalation of premiums.  Mr. Braun said that while the “Grandfather clause”  may be gradually phased out, there is still some benefit so he said “If you have flood insurance now, keep it and if possible consider buying flood insurance before October 1 of this year”.