"A new law meant to stabilize the federal government's money-losing
flood-insurance program is starting to send rates sky high, prompting a
growing backlash in coastal areas," especially in rural areas, Siobhan Hughes reports for The Wall Street Journal. "The Biggert-Waters law, enacted in 2012 before superstorm Sandy hit the
Eastern seaboard, requires that government insurance premiums for the
5.6 million property owners in flood-prone regions be set at a level
that better reflects the full risk of flooding. It was prompted by
cumulative losses that had ballooned to $24 billion for the National
Flood Insurance Program.
One property owner, Bill Bubrig, of Plaquemines Parish, Louisiana, in the state's southernmost parish, where the Mississippi River meets the Gulf of Mexico, "estimated that flood-insurance premiums on his home will
increase from $633 to $28,000 a year, with a big chunk of the increase
hitting as early as 2014," Hughes reports. "The changes mean some owners must retrofit their homes or businesses—by
raising buildings higher above the ground and taking other measures—to
better guard against flooding, or pay rates that could surge to $10,000
and higher a year. Vacation homes are subject to new insurance rates starting this year,
while primary residences already subject to flood insurance will get
new rates in phases." (Journal photo by William Widmer: Burbig at his home)
To make matters worse, the government is "redrawing flood-zone maps that will classify more properties as flood risks," Hughes writes. "To soften the impact, some members of Congress are asking the Federal Emergency Management Agency, which administers the federal flood insurance program, to delay implementing parts of the law while lawmakers consider changes to limit premium increases."
But opting out of flood insurance isn't an option for most residents, "since flood insurance is mandatory for properties with federally insured mortgages," Hughes writes. "And there is little people can do to lower premiums shy of elevating properties, which likely would cost multiple tens of thousands of dollars." (Read more)
To make matters worse, the government is "redrawing flood-zone maps that will classify more properties as flood risks," Hughes writes. "To soften the impact, some members of Congress are asking the Federal Emergency Management Agency, which administers the federal flood insurance program, to delay implementing parts of the law while lawmakers consider changes to limit premium increases."
But opting out of flood insurance isn't an option for most residents, "since flood insurance is mandatory for properties with federally insured mortgages," Hughes writes. "And there is little people can do to lower premiums shy of elevating properties, which likely would cost multiple tens of thousands of dollars." (Read more)
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