fb-pixel Skip to main content

Congress scrambles as coastal residents rail at insurance rates

Doris Crary is a Scituate property owner who has been hit with increases in the insurance premiums on several of her homes, including the house with the widow’s walk.David L Ryan/Globe Staff/File/Globe Staff

WASHINGTON — Members of Congress from coastal states including Massachusetts are banding together across party lines to respond to a rising tide of constituent complaints and reverse increases in federal flood insurance premiums mandated by a bill passed in 2012.

Massachusetts lawmakers have been vocal in their call for action: Representative John F. Tierney called the increases “extremely concerning.” Representative William R. Keating said homeowners who have lived in coastal communities for generations could now be forced to move. And Senator Edward J. Markey warned the higher premiums could close homes and businesses.

But for all the alarm members of the Massachusetts delegation are sounding, they are partly to blame. The entire state delegation in 2012, including eight of the members who are in office today, voted for the rate increases, along with most other Washington lawmakers.


At the time, Congress wanted to impose fiscal discipline on a costly federal government program that provides insurance in flood-prone areas, where private-market insurance is unavailable or too costly.

But reducing the government subsidies is saddling property owners in Massachusetts and around the country with average premium increases of 25 percent — adding hundreds, and in some cases, thousands, of dollars to annual costs.

Doris Crary, a Scituate homeowner, looked at a sea wall that collapsed in a recent storm with her husband, Dennis Badore. Four out of six properties she owns were hit last year with $600 to $900 increases in annual insurance premiums.David L. Ryan/Globe Staff

The Senate could vote this month on a measure to restore the full subsidies and delay the increases for another four years. House Speaker John Boehner has said he does not support a full reversal, but is willing to entertain changes.

In the shorter term, a provision in a $1 trillion budget bill negotiated in Congress and signed by President Obama on Friday night would postpone some of the increases until Sept. 30.

Fiscally conservative groups and House Republicans say the push will only prolong the reckoning that needs to take place for people who choose to live in coastal areas. Particularly as sea levels rise because of global climate change, specialists say, the risk of flood damage will only increase.


“If you live on top of a mountain, I don’t know that you want to be subsidizing somebody that lives in a more flood-prone area,” Representative Lynn Westmoreland, a Georgia Republican, told the Globe.

But the desire to provide constituents relief from costly insurance is uniting liberals and conservatives along geographic lines, drawing support from lawmakers representing the East and West Coasts and the Gulf of Mexico.

They’re responding to complaints from people like Doris Crary, a Scituate homeowner, who said four out of six properties she owns were hit last year with $600 to $900 increases in annual insurance premiums. She said the new rates are unwarranted: Out of her 30 years of owning property, she has experienced only one $5,000 loss due to flooding.

“We in New England are getting attacked in a really bad way,” Crary said. “What they’ve done is extremely unfair.”

All told, the program insures about 5.5 million policyholders nationwide, including 60,000 in Massachusetts.

Another factor has amplified the political pressure. At the same time as the rate increases took hold, new official flood maps issued by the federal government dramatically expanded the number of property owners subject to the flood insurance requirements.

The economic impacts are far-reaching. As property owners face the higher bills, the uncertainty over what Congress may do is creating drag on local real estate markets, with prospective buyers struggling to figure out their insurance exposure, local officials say.


Chris Haraden, director of agent services at Jack Conway & Co., a Massachusetts real estate agency, said some transactions have fallen apart in coastal communities such as Wareham, Scituate, and Norwell due to the issue’s unclear fate in Congress.

“People are not sure about what the status of the property is going to be going forward,” Haraden said. “They just don’t want to have the potential for a larger premium down the road.”

Congress was responding in 2012 to financial shortfalls in the insurance fund, which is administered by the Federal Emergency Management Agency.

The program began in 1968, after many private-sector insurers viewed flood insurance as too risky. It permits homeowners to pay just 40 to 45 percent of their full insurance cost, with taxpayers covering the rest.

In addition, taxpayers pick up the tab when natural disasters hit particular regions. Hurricane Sandy’s cost was estimated at $50 billion, a figure second only to Hurricane Katrina’s $128 billion in damage in inflation-adjusted dollars.

The 2012 change, buried in a $127 billion transportation and student loan package that easily passed both the Senate and House, raised premiums for 1.1 million property owners. Second homes, businesses, and properties with repeated flooding began facing insurance increases of 25 percent annually — until they hit market rates. Most primary residences with below-market premiums avoided the hikes, unless ownership changed. In that case, premiums increase to market rates.

Massachusetts lawmakers say they supported efforts to make the flood insurance program more sustainable in 2012, but were not told how sharply premiums would rise.


“Original debate surrounding this legislation failed to accurately predict the rate increases or provide homeowners with adequate time to prepare,” Representative James McGovern, of Worcester, told the Globe in a statement.

Keating said that because the flood insurance premium increases were part of a massive law, lawmakers could not vote on the specific insurance language.

“The overall bill meant almost $38 billion to Massachusetts and millions to my district in particular,” Keating told the Globe, explaining why he voted in favor.

In a rare mark of bipartisanship, Republicans from southern states are joining Massachusetts lawmakers to rally for the legislation rolling back the rates. Senator Johnny Isakson of Georgia, who sponsored the act with New Jersey Senator Robert Menendez, is one Republican central to the effort.

In addition to combating the higher insurance rates, the Massachusetts delegation asserts that FEMA’s flood maps are flawed because they do not accurately account for New England flooding patterns. The new federal flood maps have placed some Massachusetts residents into flood zones for the first time. In Boston alone, new maps could raise the number of properties considered in danger from 8,000 to 18,000.

Kerry Bogdan, a senior FEMA engineer for New England, said the region’s old maps were severely outdated — some by as much as 20 years. The new methodology applied the most recent engineering standards, she said.

But Patricia Vinchesi, town administrator of Scituate, said many residents in the seacoast town were surprised to learn they needed flood insurance. Duxbury, Marshfield, and Scituate have submitted appeals to FEMA to challenging the organization’s new flood maps and are awaiting a response on their resolution.


Fiscally conservative groups cite a Congressional Budget Office analysis that projects delaying the rate hikes would cost $900 million over five years and cause the program to lose $2.1 billion over a decade.

R.J. Lehmann, a senior fellow at the R Street Institute, a free-market think tank, said the government should not be subsidizing homeowners’ decisions to move into wetlands and other environmentally sensitive areas: “Homeowners should be paying what the risk bears. That is one of the bases of insurance.”

Others contend lawmakers are mixing politics with flood insurance policy.

Jimi Grande, senior vice president of federal and political affairs at the National Association of Mutual Insurance Companies, said it is easier for lawmakers to heed the will of their constituents than to pursue needed reform. His group’s members sell policies under the flood insurance program.

“It’s a short-sighted election year solution,’’ Grande said, “instead of a long-term viable policy solution that’ll address the problem.”

Kimberly Railey can be reached at kimberly.railey@globe.com.

Clarification: An earlier version of this story should have mentioned two additional Massachusetts lawmakers who were not yet in office when a 2012 vote was taken that triggered the hikes: Representative Joseph Kennedy III and Senator Elizabeth Warren.