EDITORIAL: Good ideas for flood insurance reform

March 01--The National Flood Insurance Program is in trouble, and urgent action is needed to revive a program that means so much to so many home and business owners in south Louisiana.

That was the central message that state Rep. Jerome Zeringue, R-Houma, had for the Houma-Terrebonne Chamber of Commerce when he spoke before the group Tuesday.

Zeringue, as part of the Louisiana Flood Risk Coalition, said he is seeking changes that could save the program, which is the only way many coastal and flood-plain residents can insure their homes and businesses.

The problem is that Zeringue and other advocates for common sense reforms are fighting the inertia of a federal government that has neglected the problem for far too long.

Still, Zeringue's ideas have merit.

He said there are three main goals to reform: Increase the participation rate in the flood insurance program, reducing the cost of administering it, and invest more money in preventing floods in the first place.

Those are all powerful, worthwhile goals that could help south Louisiana and other areas that depend on the insurance program to gain some certainty looking forward.

And they should be easily endorsed by anyone familiar with the problems plaguing the federal program.

Many home and business owners are required as terms of their mortgages to carry flood insurance, but the actual participation rate is somewhere between 33 and 55 percent, Zeringue said.

Even here, where folks are painfully aware of the risks of coastal living, participation rates are still lower than they should be.

But the lending institutions that benefit from making federally backed loans should have an obligation to ensure that borrowers who are required to have flood insurance have it.

If everyone who is required to carry the coverage did so, the pool of money going into the system as premiums would increase drastically. That alone would go a long way toward setting the program on better financial footing.

Lowering the administrative costs, too, should be an easy sell. The first place the government can save is by cutting back on the overly generous commissions it pays the insurance companies that write flood insurance policies. Those companies do incur some expense in signing up initial policies, but they carry none of the risk. They should receive a modest fee that allows them to recoup expenses and even show a small profit, but their compensation as it now stands is far greater than their contribution.

Finally, improving our defenses against flooding should be something we are constantly undertaking.

That process, though, has been fraught with bureaucratic delays that render many projects all but impossible.

Repeated attempts to gain federal support for Terrebonne Parish's Morganza-to-the-Gulf system of levees and floodgates resulted in nothing but frustration and delay.

Only local action propelled the project and has made it a reality -- in spite of, not because of the federal government.

Zeringue is certainly pushing reforms that will help the flood insurance program and the people and businesses that rely on it.

Let's hope the right people are listening.

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

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