Plagued by frequent stopgap funding requests for the National Flood Insurance Program, last year Congress passed legislation designed to put the program on consistent footing for the next few years, as part of a larger bill which passed along billions of dollars to Louisiana related to the 2010 drilling rig explosion in the Gulf of Mexico that caused the state environmental problems. All homeowners in a flood zone must purchase it while others may do so optionally from the program established by the federal government 45 years ago in lieu of private insurers. The idea was to set a uniform rate nationwide covering a broad-based clientele to prevent wide variations in premiums, including prohibitively expensive ones.
But it also was supposed to be self-supporting, even though by statute this was not achieved in the initial pricing and has only crept towards that ever since. Last year’s legislation was supposed to achieve that by inducing rate hikes based somewhat on risk as high as 20 percent per year over several years. Louisiana’s congressional delegation unanimously approved of it even as a few reservations were voiced, most often from Sen. Mary Landrieu and from Sen. David Vitter through his competing legislation and negotiations to limit increases and to spread them out over more time and to make it easier to demonstrate greater protection from flooding.