Flood insurance reform

Minot homeowners and their insurance agents need better information about the future of flood insurance rates, Sen. Heidi Heitkamp, D-N.D., was told at a meeting with city and Ward County officials Thursday.

People are confused over how flood insurance reform and future flood insurance rate maps could affect them, local officials said.

“I don’t know if the homeowner has a good place to go to get a good understanding,” said Cindy Hemphill, city finance director. Insurance agents aren’t getting solid information from the Federal Emergency Management Agency to help clients, she said.

Heitkamp said FEMA is hesitant with its information because of congressional changes in the works. The answer is for Congress to act soon, she said.

Heitkamp said the Senate could vote in the coming week on a bill that would delay implementation of the Biggert-Waters Act, the reform law that eliminates many subsidies and moves premiums to actuarial rates.

“I honestly believe 80 percent of the U.S. Senate wants to pass this bill,” she said. “The House has indicated there is some willingness to have conversation.”

Support in the House is sketchy, but Congressman Kevin Cramer, R-N.D., is working to build on the support that exists, said Daryl Lies, Cramer’s district representative in Minot.

The Senate’s proposed Homeowner Flood Insurance Affordability Act, backed by Heitkamp and Sen. John Hoeven, R-N.D., mandates that FEMA study and propose rules to address affordability and give Congress adequate time to review the proposals.

Heitkamp called the bill “kicking the can down the road,” but she added, “We hope the affordability study will motivate people to take a look at the deeper problems of Biggert-Waters.”

Heitkamp cited Grafton as an example of the effect of the reform law. Insurance rates there are increasing from $900 a year to $4,500 annually.

“This issue could make single-family home ownership unaffordable in our communities,” Heitkamp said. “It’s done it in Grafton. It could do it in Minot. We know that communities are built on single-family housing. This could make that unaffordable at a time in your community when you have tremendous costs for infrastructure.”

Information from the National Flood Insurance Program is that 66 properties in Ward County are subject to the insurance reform, and 35 of those have had premiums affected already. Of those 66 properties, 22 are in Minot.

Some homeowners are protected by a cap that limits increases to no more than 20 percent a year as they move toward actuarial rate. However, other owners, such as new buyers, are being charged the full actuarial rate.

A bigger concern for Minot is how FEMA’s new flood rate maps for the city might look. FEMA currently is working on maps but estimates that it could take a year and a half to complete that process.

City manager David Waind said the indication is that Minot’s protection against 5,000 cubic feet per second in the Souris River will change significantly, putting the entire valley in a higher risk category.

“That means that these rates that are actuarial rates are going to have a devastating effect on the families in our valley,” he said. “Those costs are going to be, in my view, unaffordable for a lot of people based on the numbers we have been seeing and hearing.”

Mayor Curt Zimbelman said it is uncertain how much of an increase could occur because no one knows what kind of rates might be assigned in the new flood plain.

“We are concerned that we don’t alarm people, but they need to know that there are going to be changes and that flood map is going to take in a whole lot more people,” he said.

City officials voiced concern about the impact of flood insurance on home values in the valley. City council chairman Jim Hatlelid mentioned the danger of Minot becoming a city on the hills.

Heitkamp shared the concern about losing affordable housing in the valley.

“If you move everybody up to the hills, they can’t afford that house, too,” she said.

Heitkamp added that there’s been a lot of dissatisfaction with how FEMA has created rate maps, which is an issue that the agency and Congress must address along with affordability.

“We are going to watch Minot very carefully,” Heitkamp said. “We are still pushing very hard, as the city officials know, for a long-term flood control project. Without that, you have a certain level of vulnerability.”