Flood Insurance Costs Rising to Dismay of Homeowners
Recent National Flood Insurance Program (NFIP) changes are pushing up flood insurance costs for coastal dwellers like never before. The Biggert-Waters Insurance Reform Act of 2012 took effect earlier this October. The Act is dropping subsidies for individuals with homeowners insurance for older coastal homes. Changes to the flood zone maps and the level of risk associated with various zones are also driving up rates.
Flood Insurance Costs on the Rise
Some families are facing soaring rate hikes, while others are finding themselves forced to buy flood insurance for the first time. In an interview led byÂ Les ChristieÂ of CNN Money, aÂ New Jersey homeowner faced an eight or nine fold increase in premium, but for the average family, flood insurance costs may be insurmountable. The law allows a slow progression to the new rate over the next five years, which may just give homeowners enough time to sell their houses to wealthier owners who can afford such exorbitant rates.
Homeowners Without Flood Insurance Hardest Hit
Others have it even worse as homeowners insurance rates, particularly for flood insurance, skyrocket upward.Â Otto Harling, a Massachusetts homeowner, never had to own flood insurance before. However, he will have to come up with $10,000 to cover the flood insurance premium next year. Harling says the previous flood maps placed only seven Hingham homes in flood zones, as opposed to 40 in the new map. The premium hikes should address the NFIPâ€™s $30 billion debt, much of which is a result of serious storm damage from previous years, like hurricanes Katrina and Sandy.
Homeowners, whether living on coastal lands or not, should periodically check their flood zone assessment. They can do this by going to FEMAâ€™s Map Service Center and entering their address. The website allows visitors to view or purchase the area map.
Itâ€™s also wise to check FloodSmart.gov and click on â€œNew Flood Mapsâ€ to see if any changes are pending to the map.
Photo:Â U.S. Geological Survey