Homeowners Prepare for Higher Flood Rates

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Many in the New York region are facing a series of events that are having a harsh impact on their insurance rates. An overhaul of the federal flood insurance program last year and the adoption of new flood maps for high risk areas are having an effect. The impact of Hurricane Sandy is also still having an effect for many homeowners who are trying to handle the rates for their flood insurance. As a result, government officials and organizations are trying to mobilize to prevent higher premiums from becoming a reality.

In New Jersey, local officials have paid a mapping expert to obtain certification in floodplain technology so that they can challenge the Federal Emergency Management Agency’s new flood maps. The mayor has proposed changes to make flood insurance more accessible and affordable. Senators from flood prone states have started offering amendments and bills to try to extend the time frame over which the steep rates are able to go into effect. One of the greatest concerns is that there are a lot of people throughout the country who are just beginning to learn about the rise in rates. Many still don’t know.

The Biggert-Waters Flood Insurance Act is an area that gains most of the fury from these homeowners who are aware of what’s going on. Passed in 2012 before Hurricane Sandy caused its damage, the act reauthorized the National Flood Insurance Program. Lawmakers had agreed that they needed to make changes because the program was 18 billion dollars in debt. The legislation required the elimination of long term subsidies that had been used to keep down the rates for homes that were in flood zones. Unfortunately, the hurricane followed directly after these changes.

FEMA started rushing to revise the maps that had been overdue, but this placed more people in the floodplain. As a result, the mayor’s office estimates that almost 20,000 New York homes could face higher premiums. “The risk that New York faces is a combination of residents being priced out of their homes and realistic mitigation measures not being incentivized by the strategy of the federal flood insurance program,” Seth Pinsky, a senior mayoral aide, said.

The Special Initiative for Rebuilding and Resiliency released a report last month that recommended that Biggert-Waters should be amended. This would allow for residents to be able to purchase cheaper insurance with higher deductibles. The report also said that FEMA should give financial credit to those who undertake renovations to protect their property. This would include moving boilers from the basement to the first floor instead. At the moment, the only way for people to be able to obtain lower rates is for them to raise a home above certain elevation levels. This is very difficult in New York because the housing stock tends to be older and homes are usually attached to other buildings in the area. Many economists and insurance experts have claimed that the program needed to be overhauled in order to make it more reasonable financially.