By Andy Metzger


STATE HOUSE -- Citing the potential for federal flood insurance increases to be reintroduced next year, top lawmakers are seeking to lessen the financial blow by reducing the amount of insurance banks can require under mortgage laws.

"It's not too often that I have the opportunity to appear before a legislative committee," Speaker Robert DeLeo told the Committee on Financial Services Thursday. "But I think that the gravity of this situation, I would consider to be the possible devastating economic consequences, leads me to be here today."

Attorney General Martha Coakley and others emphasized that the new Federal Emergency Management Agency flood insurance rates - which have been delayed for a year - affect people inland from the coast who live nearby rivers or lakes.

"After several months, during which so many communities received their maps and their costly technical challenges, on February 5, FEMA announced it would delay implementing the flood insurance premiums, at least until October 2015," Coakley said, noting there is legislation in both the U.S. House and Senate.

For video of Coakley's and DeLeo's testimony, go to:

For video of Coakley's comments on flood insurance at a press availability after testifying, go to http://www.statehousenews.


She said, "This delay is temporary, and passage of the reform measures are not guaranteed, particularly with the current political climate in Washington. So the bill before you would provide some relief, and some options for homeowners."

The bill (H 3783) would allow people to carry flood insurance only for the amount of the outstanding mortgage balance, not the replacement value of the home, Coakley said.

"This will lower premiums for homeowners and serve as a backstop for the astronomical flood insurance rates that people will be required to purchase," Coakley told the committee. She said, "Without this help, we're gravely concerned that many additional homeowners will face foreclosure and local merchants may be at risk for going out of business."

DeLeo represents the coastal community of Winthrop and the committee's chairmen Sen. Anthony Petruccelli, of East Boston, and Rep. Michael Costello, of Newburyport, represent areas along the seashore.

"I imagine we'll be reporting it out favorably in short order," Costello told the News Service after the hearing, saying he only had some questions on technical aspects of the bill.

Superstorm Sandy struck in the fall of 2012, causing particular damage to New York and New Jersey, a few months after Congress passed into law the Biggert-Waters Flood Insurance Reform Act, which required new flood maps, the elimination of some discounts and more accurate risk measurements to boost solvency of the National Flood Insurance Program.

The press for relief from insurance rate spikes comes amid simultaneous warnings from public officials that climate change is causing more severe storms and requires government to take action to reduce carbon emissions and better protect public assets.

Recently, Plum Island and Hull have experienced the destructive power of seawater, and the increased flood insurance rates have changed the demographics of those building homes along the beach, according to Rep. Ann-Margaret Ferrante, a Gloucester Democrat.

"I can't imagine that a homeowner would not want to make sure that it's built on solid ground, so to speak," said Ferrante, who said people who can afford to pay cash have more freedom in where they build. She told the News Service, "I've seen some folks in my district build homes knowing they wouldn't be insurable, and taking the risk that if there's a storm - they love the ocean so much that if there's a storm, they'll personally incur the loss. And I've seen other folks redesign their homes based on the fact that there are storms, and in anticipation of what rising tides may bring."

Ferrante highlighted Bearskin Neck, in Rockport, where she said the rows of businesses along the water are at risk. She said the infrastructure that serves the groundfish industry, which is struggling, are all insured by the same company, and said the "last thing we need" is an additional cost for fish processors.

"I think the model that FEMA has used is wrong. It's based on models that don't make sense at least on the East Coast," said Coakley, who said her office has helped Scituate and Marshfield to appeal the maps FEMA uses in those areas.

FEMA says the 2012 insurance law is designed "to reflect true flood risk" and to "make the program more financially stable."

Asked whether there should be a gradual withdrawal from the ocean, Coakley told reporters the sea has made incursions into Massachusetts.

"We do know that we've seen erosion consistently. We argued before the EPA that Cape Cod is losing a foot a year as a result of climate change, and so those are risks that homeowners - particularly new builders - are going to have to address," Coakley said.