No relief on flood insurance costs

U.S. Rep. Candice Miller’s aggressive effort to eliminate the National Flood Insurance Program was blown out of the water by the House Tuesday night when lawmakers voted 384-38 against the Miller amendment.

A Harrison Township Republican, Miller had argued that the NFIP harbored an $18 billion deficit and has forced property owners in Michigan and many other states to subsidize billions of dollars’ worth of aid to flood-prone areas in southern states such as Louisiana, Florida and Texas.

Miller’s main amendment would have eliminated the NFIP on Jan. 1, allowing states to join in compacts to shop for cheap flood insurance rates for their property owners, or to allow individuals to do their own shopping. That was the amendment which was voted down by roughly a 10-1 margin.

The congresswoman’s second amendment would have terminated the federal program that spent $500,000 producing TV and radio ads that urged homeowners in floodplains to participate and purchase their required NFIP policy. That promotional campaign spent more than $7 million in ad buys across the nation’s airwaves.

That amendment failed by a 238-136 vote. The final vote to reauthorize the NFIP for five years, with some minor changes in the program, was adopted by a 406-22 margin.

“I am still committed to eliminating this actuarially unsound, failing federal program,” Miller said after the vote. “The federal government is a bad insurance company, and we should be focused on allowing states to form regional insurance compacts to spread their risk, as well as working to further open the market for private insurance options — all without the federal government running the program.”

Miller’s campaign received a minor boost this spring when the Michigan House of Representatives backed a resolution urging Congress to support Miller’s proposal. But she was up against insurance industry opponents who said the elimination of NFIP would create a man-made disaster.

Closing the federal flood insurance program would put millions of homeowners at risk and cost taxpayers billions of dollars, warned the National Association of Mutual Insurance Companies, or NAMIC.

“Terminating the NFIP is not responsible public policy. The unique nature of flood risk makes it virtually impossible for private insurers to be able to offer a viable and affordable insurance product. That is why Congress created the NFIP in the first place,” said Jimi Grande, an NAMIC vice president.

Miller’s quixotic bid countered those claims with criticisms that the NFIP required flood insurance in areas that were not susceptible to flooding, including many neighborhoods inland from the Lake St. Clair shoreline. She also offered key statistics. While only 6 percent of Michigan’s land mass is flood-prone, the insurance rates dictated by the NFIP are higher in this state than in Florida or Louisiana.

Michigan residents have paid nearly five times as much in NFIP premiums than they have received back over the last three decades in insurance settlements.

Since 1978, Michigan property owners have received only 0.1 percent of nationwide flood payouts.

From 1978 to 2010, Michigan property owners paid $284 million in premiums and received $45 million in claims.