Flood insurance hike may be delayed

Published 12:00 pm Saturday, July 27, 2013

Before the reform legislation was passed that granted the delay in premium increases, rates on businesses and homes would have gone up 25 percent per year. Picayune Mayor Ed Pinero said the city is strongly opposed to the 25 percent increase because there are many citizens that live in flood prone areas.

“We’ve been working with Congressman Palazzo and Senator Wicker to correct the legislation and keep from adjusting flood insurance where it penalizes the citizens.”

During Hurricane Isaac, Pearl River County experienced flooding with some areas receiving four to five feet of water, Pinero said.

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Palazzo said in an interview with the Picayune Item on Thursday that the delay will allow Congress time to come up with a better solution and develop a better understanding of the flood insurance program. He said they are looking at every option for a long term solution.

The overhaul of the flood insurance program was passed last year with bipartisan support. Since the program was established in 1968, it has required more than $24 billion in bailouts. Most of the losses came because of subsidized insurance rates and losses from repeat claims on homes and businesses that repeatedly flood.

Palazzo said they are looking into slowing the premium increases down over 10 years with an annual increase of 10 percent a year instead of the 25 percent suggested in the previous legislation.

“We need to find a compassionate solution that insures flood insurance stays reasonable and affordable for those who need it most,” Palazzo said.

Supporters of last year’s changes say delaying the premium increases means people whose homes are at lower risk of being flooded will have to pay higher premiums to subsidize those living in flood zones.

Pinero said he is in the final phases of completing approval of the buy-back program for flood prone properties in the city. The buy-back program allows for owners of qualified homes in flood prone areas or repetitive flood loss homes to sell their property to FEMA for 75 cents on the dollar.

Under the buy-back program, the home would then be demolished and the property turned into a perpetual green space. Pinero said 25 homes are eligible and that the people he has spoken with are looking to stay in the city, but move out of their current flood-prone home.

Pinero said even though it would take some homes off the tax rolls, he doesn’t see the city having a loss in tax revenue.

The Associated Press contributed to this story.