Asteroid Insurance


"It's not about flooding. It's about funding." (Long Beach realtor Joe Sopo at 1996 Long Beach community meeting re Congressionally-imposed flood insurance.)

(June 24, 2012, 6:00 a.m.) -- If you own a home or commercial property within the shaded areas on the maps below, and it carries a mortgage or loan from a federally backed lender (like a bank or S&L), it would behoove you to pay attention to what follows.

As first reported last year and is first (again) to report now, some in Congress -- from both parties -- are poised to approve legislation that could force you to pay several hundred out of pocket dollars each year -- that you won't be able to spend on your family or at area businesses -- to a bureaucratic agency (FEMA) that runs the National Flood Insurance Program. FEMA's insurance machinery doesn't have sufficient premium revenue to pay flood claims from disasters like Hurricane Katrina, so like any predatory insurer Congress hopes to harvest new premiums from areas with little risk of payout.

The vehicle is federal legislation (S. 1940) that would fund FEMA in part by declaring areas now with 100-year flood protection from federally certified levees and dams at a so-called "residual" risk -- a "500 year" or 0.002 annual flood risk...and empowering FEMA to collect annual flood insurance premiums from property owners with federally backed loans in these areas.

In our opinion, this is cynically pretextual, little different than asteroid insurance.

The legislation, which is scheduled for Senate discussion starting at 11 a.m. Pacific time on Monday June 25 ( will carry LIVE video on our front page -- would apply nationwide and have some of its most egregious impacts in the Long Beach/southeast L.A. County area. In the 1990s, when FEMA initially targeted the area claiming L.A. river levees needed to be raised, roughly 400,000 residents and 125,000 structures were impacted with economic costs (estimated by a 1991 USC study prior to mitigating legislation) at $131 million.

As Long Beach Mayor Bob Foster said in an August 2011 letter to Senators Barbara Boxer and Dianne Feinstein, the portion of the now-pending legislation imposing so-called "residual risk" flood insurance would "unnecessarily damage our local and state economies" with annual premiums increasing to $295 million" [based on the Congressional Budget office's estimate] with economic impacts and job losses that "would certainly be greater than the estimates of 20 years ago."

In August 2011, Mayor Foster urged CA's two U.S. Senators to remove the "residual risk" verbiage from the bill. In July, the Republican-majority House did so (with LB area Congressmembers Laura Richardson (D) and Dana Rohrabacher (R) both voted to remove the damaging language). If Senators leave that damaging language in the bill, it will proceed to a House-Senate conference committee where a handful of leadership-picked lawmakers from both parties will decide whether the mandatory flood insurance language remains...or if the House version of the bill -- which doesn't include the "residual risk" verbiage -- is brought to a final enacting vote.

If the residual risk language remains in the final version of the bill and passes (in a single up or down vote in each body), it will be sent to the White House where President Obama will almost certainly sign it into law. If that happens, every homeowner and commercial property owner with a federally backed mortgage within the areas on the maps above will eventually receive notices from their lenders informing them that federal law now requires them to begin paying flood insurance premiums (again). No, the bill doesn't say exactly how much that will cost. Congress, in another cynical maneuver, has empowered FEMA (which stands to collect the premiums) to dictate those prices as long as they "accurately" reflect the "risk."

The real world "risk" here isn't from an asteroid-unlikely flood. The real world risk is from a Congressionally-inflicted economic blow to Long Beach and southeast Los Angeles County families and businesses already kicked to the ground by The Great Recession (arguably invited in part by reckless federal actions). will continue to cover this story in detail (which others haven't done thus far). Our editorials will spare no parties, politicians or political candidates.

It's fair to ask Congressional candidate/LB Councilman Gary DeLong -- who chairs the Council's Federal Legislation Committee where he oversaw inclusion of helpful policy verbiage on this issue -- what he did to advance that position during his multiple travels to Washington, D.C. this year and with what results.

It's fair to ask Congressional candidate/state Senator Alan Lowenthal -- who we're told plans a fundraiser featuring U.S. Senator Barbara Boxer -- if he secured her commitment to remove the "residual risk" language from the Senate version of bill.

It's fair to ask Long Beach Mayor Foster, who signed a helpful Aug. 2011 letter to members of the House and Senate why he didn't mention the pending federal legislation and its potentially damaging economic impacts as a priority matter in his 2012 "State of the City" message this year.

And it's fair to ask the Mayors and Council members of every southeast L.A. County city impacted, from Lakewood through Pico Rivera, what they did to protect their residents and businesses in this. intends to Velcro each and every elected official from local City Halls to Capitol Hill to their records on this 100% governmentally-created financial blow to families and the local economy. We will debunk buck-passing and go where the truth leads on this no matter whose toes it steps on.

If those "residual risk" insurance premium notices start arriving -- and we expect they will be several hundred dollars each year (plus future rate increases) for many homeowners -- those elected officials and candidates will be the ones who delivered them to your door.

UPDATE: For our suggested response to this, see: Editorial: Our Action Plan re Senate Bill That Could Force Many Low-Risk LB & Southeast L.A. County Homeowners To Pay For Costly Annual Fed'l "Flood Insurance"

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