NewburyportNews.com, Newburyport, MA

October 10, 2013

Pols push for delay of new rates

Leaders cite 'grave concern' as residents face sharp insurance increases

BY DYKE HENDRICKSON
STAFF WRITER

---- — NEWBURYPORT — Members of the state’s congressional delegation have joined together to press for a delay of the implementation of new rates for residences and businesses within the flood plain, as recently defined by the Federal Emergency Management Agency.

Legislators, including U.S. Rep. John Tierney, D-Salem, are reacting to alarm recently demonstrated by property owners near the ocean, the marshes and rivers of this community and others in the region.

The congressional team is asking for assistance from Senate and House leadership “to remedy some unintended consequences of the Biggert-Waters Flood Insurance Reform Act of 2012” that is mandating higher insurance rates.

Tierney, in a recent letter to constituents, said that more than 3,000 Essex County residents are facing sharp increases in flood insurance premiums after FEMA revised flood maps across the county.

Higher rates have been levied as part of the act, passed in part because federal officials say they can no longer offer subsidized insurance programs. They have said that due to a growing number of natural disasters, it is difficult for insurance programs to make pay-outs to all policy-holders.

A letter from the congressional delegation to top leaders said, “We have grave concerns about its implementation, especially as it intersects with the ongoing work to update flood maps.

“Reports from residents and businesses in Massachusetts have described the potential for dramatic and completely unaffordable flood-insurance premiums.”

Perhaps because of the federal shutdown, local banking and insurance leaders have been having difficulty learning exactly what the new costs will be.

“We’re trying to learn more but for the moment it has been difficult to get answers,” said Larry Hunter, senior vice president of residential lending at the Institution for Savings. “We’re required to escrow for flood insurance for those (mortgagees) who own property in the affected areas and we’re consulting with insurance companies. But at this point there’s not a lot of information available.”

Without specifics, Hunter said that he had heard reports of significant increases.

“Anecdotally,” Hunter said, “I’ve heard costs could go up ten-fold.”

Marc Sarkady, who heads the Plum Island Foundation and owns a residence on the island, said, “I haven’t seen the figures, but I understand the increase is going to be between really enormous and unbelievably large.”

The letter that leaders are sending to the Capitol requests leaders “to ensure that the following steps are taken to address the following challenges: adequate funding for the National Academy of Sciences to complete an affordability study, and a delay in the immediate premium rate increase for small business and for sales of residential properties.

The letter was directed to top leaders, including Senate Majority Leader Harry Reid and Speaker of the House John Boehner.

Those signing the request included Sens. Edward Markey and Elizabeth Warren, Tierney, and the state’s eight other congressional representatives.