Homeowners can expect hikes in flood insurance rates

Published: Thursday, April 4, 2013 at 11:49 AM.

 

Many coastal-area homeowners hit by waves of property insurance increases in recent years should get ready for another pounding.

A new federal law is threatening huge hikes in flood insurance premiums for certain homes and businesses when it kicks in this year and next.

The law, called the Biggert-Waters Flood Insurance Reform Act and passed last July, is an effort by Congress to recover losses to the government’s National Flood Insurance Program – largely from Hurricane Katrina in 2005 — and to make the program financially sound, said Spencer Rogers, a coastal engineering specialist at N.C. Sea Grant.

As private insurers dropped out of the market, the government developed its program as to make sure that people who live in flood plains have access to insurance.

Goodbye, subsidies

Under the new rules, subsidies that homeowners have enjoyed on the government’s program since the mid-1970s will go away, substantially raising premiums for second homes and investment property located in flood zones.



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