A flood of opposition to insurance and map changes
Anyone who lives near the ocean in New England knows it comes with a cost, but one of the prices that homeowners pay for the privilege is high insurance premiums Now, a perfect storm of newly drawn maps and the way the federal flood insurance works will hike costs not only for those who have been paying the high premiums for years but for thousands of homeowners who weren’t previously in flood zone regions.
When a homeowner lives in a designated flood zone, standard homeowners insurance is not available, forcing the owner to enter into the National Flood insurance Program. The premiums have always been somewhat high but if you have to have property damage insurance – and everyone does if they have a mortgage – it was the cost of living near the water. But the saving grace for some is that rates were grandfathered for some of the oldest residents while others qualified for subsidies, meaning the premiums at least were predictable and steady.
But last year, Congress, reflecting the growing animosity of taxpayers to subsidizing the cost of rebuilding homes for people who choose to live in high-risk regions, passed the Biggert-Waters Flood Insurance Reform Act. The law looked to shore up the flood insurance fund, which was $18 billion in the red after Hurricane Katrina and now has a deficit of nearly $24 billion after Hurricane Sandy. The law will bring insurance premiums up to market rate and eliminate the grandfathered clauses for current policyholders.
On the tail of that action, the Federal Emergency Management Administration drew up new flood zone maps that engineers reconfigured to include storm surge and increased elevations for those with a 1 percent or higher risk of flooding. Those new maps, which go into effect on October 16 following a 90-day public comment period, are causing some people whose basements have only seen water when the washing machine leaks to buy into the program at mind-numbing rates.
The flood insurance program covers more than 5.6 million homes nationwide and they are not just coastal. Those who live near rivers in Vermont or the Midwest or around the Great Lakes will also be affected by the new maps and the change in the flood insurance program.
Adopting the maps is voluntary. Community officials can accept or reject the maps, but voting them down means no homeowner in the area can buy flood insurance through the national program. So it’s voluntary with a wink.
Marshfield and Scituate officials have hired experts to appeal the new maps. US Rep. Stephen Lynch says he will explore seeking an injunction against the new rates and the new maps, but a FEMA official told Congress it could be up to two years before they are able to determine the effect of the premium increases.
Perhaps the answer lies in areas outside the program but inside the flood zones. Nicholas Pinter, a professor of geology and an expert in flood zone management at Southern Illinois University, offers, in an oped column in the New York Times, that the solution may be in investment. Pinter says the government can buy out high-risk homeowners as well as invest in elevating at-risk home and creating some barriers against storm surge. He points out that studies show for every dollar spent on mitigation, the government realizes a savings of $4 to $5.
“If harsh medicine is in order — and the programs’ $25 billion debt says it is,” he writes, “then the cure should be effective and permanent, but not kill the patient in the process.”
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