Changes to National Flood Insurance Program could mean rate hikes for some
A Florida necessity is hitting nearly unaffordable rates. Flood insurance rates are about to get a major hike, as companies adapt to the predicted sea level rise in our coastal communities.
The National Flood Insurance Program is changing the way it calculates what each property owner has to pay.
Instead of charging based solely on whether a home is within or outside a flood zone, the program will now consider a range of factors, including how close a home is to the Gulf of Mexico for example and the cost to rebuild it.
Tim Dennis bought this home eight years ago.
“Back then, the flood insurance was $2,200 a year,” Dennis said. “But the last time I got a notice from FEMA, they want $8,000 a year for the same coverage.”
That was too much. Because Dennis paid off his mortgage early, he cancelled his flood insurance.
“And to hear that they are thinking of going even higher, seems beyond understanding how that could be so expensive,” Dennis said.
The thinking of going higher is over. It will soon be reality.
FEMA says 20% of policy holders — about 340 thousand people — will see a decrease.
68% — millions of people will see their premiums rise less than $120 a year.
8% — 134 thousand people — will see an increase as high as $240 a year.
About 4% — 73,000 people — will see rates go higher than that.
“It’s going to make them so expensive that the cities that are very near the water or like Cape Coral, people would just move farther inland,” Dennis said. “And that Cape Coral will become abandoned more or less.”