Flood insurance rates are set to rise throughout the US
Flood insurance throughout the U.S. is expected to become costlier as legislation passed last year concerning the National Flood Insurance Program comes to fruition. The legislation was designed to address the several, severe financial problems that the flood insurance program has faced over the past several years. The program first began experiencing these troubles in the wake of Hurricane Katrina. The storm dealt such a powerful blow that the federal program has not yet recovered. Ensuing years of floods throughout the country have added more pressure to the program’s financial fragility.
Rate increase of 25% to hit homeowners
Homeowners in regions that are prone to floods can expect to see their flood insurance rates rise by an average of 25%. Those that live outside of such regions are unlikely to find refuge from higher rates, however, as the Federal Emergency Management Agency is currently revising its flood maps. These flood maps are used to determine the flood risks that certain parts of the country represent. Those in high-risk areas pay more for flood insurance coverage, which can typically only be acquired through the National Flood Insurance Program.
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Massachusetts begins seeing impact from higher rates and revised flood maps
Massachusetts is one of the states where flood maps are being redrawn. The state boasts of some 60,000 insurance policies that each represents an average of $1,160 in annual premiums. These premiums are expected to reach new heights as the new regions are designated as high-risk flood zones. Higher flood insurance rates have already begun affecting some homeowners, but the entirety of these rate increases have not yet been doled out.
Lawmakers continue to work on National Flood Insurance Program
Federal lawmakers have been working to address the issues faced by the National Flood Insurance Program for some time. It has been common practice over the past few years to simply put off addressing these issues, but the flood insurance program is beginning to represent a very grim financial risk for the country. Lawmakers are keen to fix the program’s problems before another major storm can cause significant damage that could exacerbate the program’s issues.