Residents of the area had been expected to pay up to ten times more for coverage, but this may not be the case.
Homeowners living in the Tampa Bay area who were feeling increasing concern about flood insurance prices that could soon be skyrocketing may now be breathing a great deal easier with the chance that relief may be on its way.
Over the last few months, the cost of this type of coverage was sent skyward in the region.
Homeowners found themselves facing flood insurance bills that they couldn’t believe, as the latest reforms to the law went into effect. The Biggert-Waters Flood Insurance Reform Act was an effort made by congress to try to resurrect the federal program following the disastrous effect that Hurricane Katrina had on it. However, this has meant that the bills that property owners have had to pay in order to keep up their protection have risen by many times more than what they had previously been paying.
Losing the federal flood insurance subsidies meant that they were paying much higher rates.
According to Florida Senator Bill Nelson “To go from a position that you are paying rates here, and to all of a sudden to go to a position there, people are completely priced out of the market.” The senator is among a small group of lawmakers that is currently attempting to pass legislation that would halt the increases in rates for another four years. This would provide consumers with some relief from the current risk of massive rate hikes.
The senators are hoping that FEMA will conduct a study on affordability before they choose to move ahead in the rate increases for the flood insurance. Nelson added “Let’s have a little common sense.”
Some agents are finding that, when compared to the hiked rates for the federal program, they are able to find far cheaper coverage through private flood insurance companies. They are discovering that once the subsidies are removed, it is the private insurers and not the federal program that have the lowest rates to offer, in many cases. For example, for homeowners in the Tampa Bay area, Lloyd’s of London is offering equivalent coverage for $4,000 where the federal program is charging premiums from $20,000 to $40,000 per year.