Dole Tells Banking Committee: Insurance Reforms Should Not Disproportionately Affect North Carolina

U.S. Senator Elizabeth Dole told the Senate Banking Committee on proposals to reform the National Flood Insurance Program, meeting in Washington that North Carolinians recognize their vulnerability to flooding and are taking proactive steps by undertaking one of the most advanced mapping programs in the nation to better identify areas of risk.

Dole told the committee the National Flood Insurance Program, covers approximately 147,000 homes in North Carolina, many of which have felt the impact of flooding in the wake of hurricanes, like Isabel, Frances, Ivan, and most recently last summer, Ophelia.

“With FEMA¹s essential support, our maps provide community, state and national leaders with clear delineations regarding the areas vulnerable to floods,” Dole explained. “This allows our communities to properly plan for current and future development.”

The senator said the availability of flood insurance also provides needed security for these communities.

“No one could have foreseen the strains that Hurricanes Katrina and Rita would place on this critical program,” Dole said. “In December, Congress raised the program¹s borrowing authority to $18.5 billion. Still, FEMA anticipates as much as $23.5 billion in claims, more than the program has paid out in total over its more than 30 year history. FEMA informs us that its current borrowing authority will only provide enough funds to last through mid-February. Clearly, Congress will soon need to raise further the borrowing authority for the program and we again should not hesitate to do so.”

Dole said she strongly supports efforts to make responsible reforms to strengthen and improve the program; however said, “We must fully understand the impact of any change before its implementation. Three reform proposals are of particular concern to me because of their possible negative impacts on North Carolina.

“First, moving from the current 100 year flood plain insurance requirement to a 500 year requirement. Since North Carolina has advanced flood plain maps, it is clear where our 500 year flood plains are located; however, flood maps in other states have, for the most part, only gotten older. In fact, according to FEMA only 25 percent of 500 year flood plains have been mapped.

“We would need to know how and if other states with less sophisticated maps would be able to implement this policy,” she said.

“I also find it troubling that, according to the North Carolina Flood Plain Managers Association, this policy change would require 15 to 20 percent more North Carolinians to purchase flood insurance,” Dole continued. “This would largely impact folks in the poorer areas of eastern North Carolina. Such a change in policy should not disproportionately affect North Carolina, particularly those in poorer areas.

“If Congress were to approve a 500 year flood plain purchase requirement, I would certainly hope that families subject to this new law would pay premiums that reflect the lower risk of their area,” the senator said. “We must have assurance of this before even considering any such proposal.

“Second, in 2004, this committee approved and the president signed into law legislation reauthorizing the flood insurance program. In the 2004 act, we defined a repetitive loss as four events or more that have claims of more than $5,000. Given North Carolina¹s history of hurricanes, I believe that a proposal to remove families with four or more claims will make most of eastern North Carolina ineligible for the program. I would hope that the committee would consider such a reform¹s impact on their state as well.

Dole voiced concern about a proposal to more than double the current 10 percent-per-year cap on flood insurance premium increases.

“While I understand the great need to bring additional funds into the program, a consistent 25 percent increase in flood insurance premiums for the next few years is excessive and therefore this also needs to be reconsidered,” Dole commented.

“It is my hope that with a clear understanding of the consequences of these reforms, we can quickly come to an agreement and move forward with a suitable proposal that will ensure that this important program continues,” she said. “Families in North Carolina and throughout our nation certainly deserve the security and peace of mind that the National Flood Insurance Program provides.”

Topics Flood North Carolina