Proposed legislation in Oklahoma could prevent flood insurance policies from being written or renewed in the state, the Tulsa World reported last week.
According to the Oklahoma Floodplain Managers Association, current bills in the state legislature that prohibit cities from regulating oil and natural gas drilling operations could also come into conflict with the National Flood Insurance Program.
In a letter to lawmakers, association members explain that NFIP requires participating communities to adopt and enforce ordinances that reduce flooding risk in “special flood hazard areas.” In exchange for the “100-year floodplain,” the government subsidizes flood insurance.
Because drilling operations can have a significant impact on the environment, making flooding more likely, NFIP could refuse to cover homeowners and businesses in the area.
Tom Leatherbee, chairman of insurance and regulatory affairs for the association, told the Associated Press he has talked to several lawmakers about the conflict and though they seem concerned, “it hasn’t gone anywhere.”
“These bills are being pushed very strongly,” Leatherbee said. “We weren’t in a position of asking for any specific outcome. All we did is provide information that there might be an unintended consequence here.”
Leatherbee said the issues could be fixed quite easily by adding language that would not change the purpose of the legislation: to regulate drilling issues like setbacks, noise, odor and dust.
At least three such bills are currently pending in the legislature. If the issues are not addressed and the bills pass, the association believes flood insurance coverage could either disappear or become significantly more expensive in certain parts of the state.
The news comes at a time when flood insurance across the country are surging an average 15% to 18%, as Congress’ changes to the Homeowner Flood Insurance Affordability Act go into effect.
In addition to the premium increases on primary and secondary residences, policyholders are also facing new surcharges on policies: $25 for primary homes and $250 for all others.
