WILKES-BARRE — Jeff King is among the hundreds of thousands of homeowners — thousands of whom live in Northeastern Pennsylvania — breathing a sigh of relief Friday after President Barack Obama indicated he would sign a bill to scale back flood insurance premium increases.
But, King said, while the four-year-delay will save him and others thousands of dollars over that time, it doesn’t solve the problem and only creates “a ticking time bomb.”
“They’re playing politics with our homes,” said King, who lives on Regent Street in Wilkes-Barre.
Had the changes went into effect, his flood insurance premium would have increased nearly 600 percent over five years, from $788 a year to more than $6,000 in the fifth year of the rollout.
But it does give Congress a chance to work on a fix without breaking the bank for homeowners.
“The passage,” said U.S. Rep. Matt Cartwright, D-Moosic, “will help guard against dramatic rate hikes in flood insurance premiums that have made many policies unaffordable, depressed home prices, and undercut the ability to buy or sell a home.”
Though the halt will save homeowners money while Congress deals with keeping the flood fund solvent, King said that without a fix “that doesn’t come on the backs of home owners” a financial threat remains.
Just having the possibility of steep increases will cause issues for homeowners, especially those thinking of selling their homes, he said.
He tried to sell his home last year but once potential buyers found out that a $90,000 home would have flood insurance premiums of $588 per month, they passed.
The hard-fought 2012 rewrite of the federal flood insurance program was aimed at weaning hundreds of thousands of homeowners off subsidized rates and required extensive updating of the flood maps used to set premiums. But its implementation raised fears and anger among many homeowners along the coasts and in flood plains.
Complaints were made with elected officials who reversed course and pushed to turn back one of the provisions of the law they had implemented just a year earlier.
Both Pennsylvania U.S. senators — Bob Casey, D-Scranton, and Pat Toomey, R-Lehigh Valley — voted in favor of it in the Senate on Thursday. But at least one senator raised concerns over giving in to political pressure.
“We’ve solved a very short-term problem and made it a long-term problem,” Sen. Tom Coburn, R-Okla., told The Associated Press. “We didn’t really do our work because we were in such a hurry to take the political pressure off of the increases in the flood insurance rates.”
The flood program is presently $24 billion in the red, mostly because of huge losses from Hurricane Katrina and Superstorm Sandy, according to the AP.
“This bill will protect policyholders from the most dramatic and unaffordable premium increases by capping individual rate increases at a maximum of 18 percent annually,” Casey noted in a release. “This legislation also asks FEMA to strive to keep premiums at a maximum of 1 percent of the value of coverage. These affordability measures will help ensure that we have a strong, sustainable flood insurance program that does not hurt local property markets.”