Flood insurance rates to rise 25 percent each year

Insurance Commissioner Jim Donelon
Insurance Commissioner Jim Donelon

BATON ROUGE, LA (WAFB) - Louisiana Insurance Commissioner Jim Donelon says he feels for homeowners who have to pay rising flood insurance rates.  Under the Biggert-Waters Flood Reform Act of 2012, rates will go up 25 percent annually for the next five years.

Donelon's office is powerless to stop it.

"I wish they would change the name because the National Flood Insurance program is a FEMA program. It's not an insurance program, but everybody thinks it's insurance. Rightfully looks to me for input, guidance, whatever," said Donelon. "I can't fix it."

Senator Mary Landrieu says her office will work diligently to derail the looming rate hikes.

"It's terrible and we're hearing that. And we're working very hard to do everything we can to fix this," said Landrieu. "The bill never should have passed. It did. We have to find a way to delay it, transform it, to fix it."

As the October 1st deadline looms, congressional members have been getting heat from constituents in both parties to delay the provisions of the act or repeal it altogether.

"Nobody knew when they voted for that bill what the implications of it would be," said Donelon. "As it turns out, these dramatic rate increases we're hearing about will render thousands of properties in Louisiana worthless. They won't be worth the cost of insurance to put a structure on it."

Both the national real estate lobby and the banking industry are leaning heavily on Congress to change the Insurance Reform Act of 2012.

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