Press Releases

Feinstein: Flood Insurance Fairness Act will Protect Policyholders, Lower Rates

“Californians should be charged the same insurance rates if they face the same risk—regardless of who owns the levee”

Washington—In an effort to lower the cost of flood insurance for Californians who live near levees constructed by local governments, Senator Dianne Feinstein (D-Calif.) today introduced legislation to bring parity to the flood insurance market and incentivize local governments to construct more flood protection systems.

Under current law, if a local government establishes a plan to prevent flooding by building a levee, the National Flood Insurance Program prohibits homeowners from receiving the same discounted insurance they would otherwise receive if the levee were built by the federal government or Army Corps of Engineers. 

If the levees protecting these homes were owned by the federal government instead of the local reclamation districts or the state of California, the area would be eligible for discounted insurance.

“In some areas of the country, homeowners are billed an additional $700 dollars each year for flood insurance simply because their local government built the levee protecting their home—not the federal government,” said Senator Feinstein.  “In other words, these Californians are being charged more to insure their properties, simply because their local municipality did the right thing and built a levee.”
Feinstein’s Flood Protection Fairness Act of 2011 will make three common sense changes to the National Flood Insurance Program by allowing:

  • Levees built with local tax dollars to qualify for the same discounted flood insurance rates as communities that rely on federal tax dollars;
  • Areas protected by coastal levees to qualify for the same flood insurance rate zones as areas protected by riverine levees, provided they meet equivalent flood protection standards.
  • Federal Emergency Management Agency (FEMA) to calculate the value of a levee system in current dollars instead of using the un-inflated cost of levee improvements completed years ago.

“Communities looking to improve flood protection in their area should not be penalized for paying for it themselves.  And, residents should be charged the same insurance rates if they face the same risk--regardless of who owns the levee that protects their home.  The Flood Protection Fairness Act will give these two important principles the force of law,” continued Feinstein.

In Sacramento, CA, residents have already approved two property assessment  increases to help pay for levee repairs, yet the homeowners are still hit with exorbitant insurance rates because  the improvements have not been authorized for federal participation or are not being paid for by the federal government.

A new flood insurance rate map in Sacramento will classify the area as an AE zone.  This means that many residents living in new construction will be forced to pay $2,187 per year for $250,000 worth of insurance.  However, if the levees protecting these homes were owned by the federal government, the same $250,000 of flood insurance coverage would cost $1,472 per year – a $715 dollar difference. 

Companion legislation (H.R. 902) was introduced in the House of Representatives by Congresswoman Doris Matsui (CA-05).