FEMA working to raise flood insurance rates
Despite the controversy surrounding this particular issue, the Federal Emergency Management Agency continued work to prepare customers of the National Flood Insurance Program for higher premiums in the near future. The agency has been making revisions to the flood maps that are used to categorize properties and designate regions of the U.S. that are prone to catastrophic flooding. In some states, lawmakers have been able to convince the agency to back down from making aggressive revisions to its flood maps, thereby introducing only modest increases to flood insurance prices. In the majority of the country, however, this has not been the case.
Agency may be able to prepare consumers for higher rates on coverage
Homeowners that receive coverage through the National Flood Insurance Program are likely to see higher premiums in the coming months and years. FEMA, in an effort to help solve the problems associated with the federal flood insurance program, has plans to raise rates, but will be working aggressively to prepare consumers for higher premiums. The agency has begun increasing deductibles on coverage in order to cut down on the rate shock that consumers are expected to experience as flood insurance premiums begin to rise.
25% rate increase for many properties expected
Premiums for vacation and rental homes are expected to increase by 25% on January 1, 2014. The premiums on these properties will continue to rise each year to reflect the financial needs of the National Flood Insurance Program and account for the risks that are associated with their particular area. Properties that have suffered repeated losses in the past or had fallen victim to substantial damage are likely to see premiums jump by 25% as well, beginning October 1 of this year.
New property owners will have to pay for their own coverage
Beginning in July of this year, new property owner, as well as those that have let their flood insurance policies lapse in the past, will no longer be eligible for government-subsidized flood insurance coverage. These property owners, many of whom are required to purchase flood insurance coverage as part of their mortgage agreement, will be forced to pay for the coverage they need themselves in the future.