EDITORIAL: Flood insurance bill looks like a step forward

Nov. 17--The U.S. House of Representative has moved forward a compromise bill that would stabilize the National Flood Insurance Program.

That is good news for local home and business owners who use the subsidized program to purchase flood insurance that is not available on the private market but that is required by many of our mortgage companies and banks.

The problem is that the program is drowning in debt. And a series of short-term extensions haven't gotten to the root issues underlying the long-term difficulties.

This bill doesn't get to many of the root causes either, but it does represent an improvement over the current situation.

Because the flood insurance program is set to expire at the end of the year, lawmakers are under a tight timeline to get an extension in place.

A long-term extension that addresses some of the real weaknesses of the program would be the ideal for the people of south Louisiana and others across the nation who live close to the water.

But this bill -- which is likely to raise insurance premiums on many policy holders -- should allow the program to maintain a better financial balance.

U.S. Rep. Steve Scalise, R-Jefferson, whose district includes the southern portions of Lafourche and Terrebonne parishes, worked out the compromise, which will bump up premiums but will allow a number of provisions that will help coastal residents.

"This bill is important. It has really good reforms for taxpayers. It gives real certainty to policyholders," Scalise said.

That does sound promising.

Congress should address more of the fundamental flaws in the program rather than simply increasing the premiums.

For instance, the program pays a generous percentage of the premiums to the insurance companies that sign up the policy holders -- even though those companies carry absolutely none of the risk of the coverage.

And, although many people are required to carry flood insurance, few do. That means that there is a much smaller pool of policy holders paying into the program. With a bit of work enforcing the requirement, the program could greatly expand its pool of policy holders and its annual revenue.

Still, it is important that Congress finds a way to extend a program that is so important to so many local people and businesses -- protecting their largest investments in the face of catastrophe.

This isn't an ideal solution, but does look like a step forward.

Editorials represent the opinion of the newspaper, not of any individual.

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