All South Floridians in the House voted against flood-insurance overhaul. Here’s why

Pedestrians make their way through the flooded streets in the Brickell area of Miami on Aug. 1. Property owners in Miami-Dade, Broward and Palm Beach counties account for 16.5 percent of all flood insurance policies across the country.
Pedestrians make their way through the flooded streets in the Brickell area of Miami on Aug. 1. Property owners in Miami-Dade, Broward and Palm Beach counties account for 16.5 percent of all flood insurance policies across the country. cjuste@miamiherald.com

The entire South Florida delegation in the House of Representatives voted Tuesday against a proposal to overhaul the National Flood Insurance Program, as Congress seeks a long-term solution for the program saddled with billions in debt after Hurricane Irma.

Miami Republican Reps. Ileana Ros-Lehtinen, Mario Diaz-Balart and Carlos Curbelo joined the majority of Democrats to vote against the proposal, which passed by a vote of 237-189. Fifteen Democrats voted in favor.

“It doesn’t make the changes that I need to satisfy ... a big percentage of my district,” said Ros-Lehtinen, who represents Miami Beach and coastal areas of central Miami-Dade County. “We have a lot of homes that are highly valued and it’s going to incur a lot of cost. It’s got to be fair for everybody. To have a home that you can’t find anybody to insure, that doesn’t do anyone any good.”

South Florida Democratic Reps. Frederica Wilson, Debbie Wasserman Schultz, Lois Frankel, Alcee Hastings and Ted Deutch also voted against the bill.

The National Flood Insurance Program is set to run out of money by Dec. 8, and if Congress lets the program lapse, thousands of real estate transactions and construction projects in flood-prone areas could be affected. Florida has 35 percent of the nation’s 5 million policies covered by the federal program — three times as many as the second-ranked state, Texas, which has 593,000 policies.

The flood insurance funding bill was the product of an agreement between House Financial Services Committee chairman Jeb Hensarling, R-Texas, and Majority Whip Steve Scalise, R-La. Hensarling has fought for years to privatize portions of the flood insurance program in an effort to make it fiscally solvent. Lawmakers from coastal areas, like Scalise, have cautioned that reforms could result in higher premiums and hurt investment.

“Being from Louisiana and Texas, we are all too familiar with the devastating effects of floods and the havoc they wreak on communities,” Scalise and Hensarling said in a joint statement. “The bill we support will begin to make the flood insurance program more stable and sustainable for the people who count on it.”

Curbelo said he appreciated Hensarling’s willingness to compromise but that his legislation “falls short in making the reforms necessary to make the National Flood Insurance Program workable for South Florida families and small businesses.”

“Much more must be done to ensure the NFIP is on a sustainable path,” Curbelo said in a statement. “More funding for mapping technology and pre-disaster mitigation efforts must be adequately addressed to help assess future flood risks, which will result in lower rates for South Florida and across the country.”

The bill lowers the annual caps on rate hikes for most homes, while opening up the flood insurance market to private insurers by moving towards policies that cover the total replacement cost of a home instead of the current $250,000 cap. Opponents argue that putting flood-prone homes into a private insurance market will result in soaring premiums for homeowners.

Matt Nielsen, a senior director for governmental and regulatory affairs at Risk Management Solutions, a worldwide catastrophic-risk-modeling company, said the private insurers could give high-income households more flexibility when purchasing flood insurance while also better protecting taxpayer dollars after a major hurricane or flood, since the federal government won’t solely be on the hook for damages.

But that means some homeowners could pay higher flood-insurance premiums.

“While it’s not a given that each policyholder will indeed pay more for flood insurance in the private market compared to NFIP, the NFIP isn’t currently designed to absorb large catastrophic losses,” Nielsen said. “The longer that the NFIP continues on its current path of designing rates based on an average flood year, the further into debt they will fall over the long run. The benefit of private market participation is that insurance companies can diversify their risk, while NFIP is stuck with only adverse risk selection.”

Nielsen also said the bill gives local municipalities more control over drawing their own flood insurance maps over federal entities like FEMA.

“Imagine that a town isn’t satisfied with the FEMA maps and doesn’t understand how they’ve derived their flood zone assessments,” Nielsen said. “They would, if this bill passes, have broader authority to quantify their own flood risk and use that as the basis for mandatory flood insurance determination.”

Together, Miami-Dade, Broward and Palm Beach counties hold 825,000 flood insurance policies. The cities of Miami, Miami Beach and Fort Lauderdale hold more policies, 132,000, than the entire state of North Carolina.

If Congress can’t agree to a long-term overhaul, it could opt for a short-term renewal instead. The House and Senate agreed to a short-term renewal earlier this year after Hurricanes Harvey and Irma added billions in debt to the program.

“It’s certainly possible that they would pass a bill by Dec. 8, but I imagine that they will need to remove the more controversial elements to get that done,” Nielsen said.

Ros-Lehtinen was adamant that Tuesday’s proposal won’t turn into law unless major changes are made, though the deal between Scalise and Hensarling “moves it in the right direction.”

“This is not going to be it,” Ros-Lehtinen said.

Miami Herald staff writer David Smiley contributed to this report.

Alex Daugherty: 202-383-6049, @alextdaugherty