Insurance coverage continues to become more expensive despite new law
Last week, President Barack Obama signed the Homeowner Flood Insurance Affordability Act into law. The legislation repeals provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 that were responsible for the dramatic rise in flood protection premiums. While these provisions have been repealed, insurance premiums are still expected to rise over the coming months, especially due to the fact that government subsidies meant to reduce the financial impact of higher premiums begin to expire.
Rates are growing by 25% in some parts of the state
In West Virginia, flood insurance rates continue to rise. In southern parts of the state, communities that have not seen any significant flood disaster since 2010 are seeing their premiums rise between 18% and 25%. Rates are rising quickly due to revisions being made to the Federal Emergency Management Agency’s flood maps. These flood maps are used to identify risk zones that are prone to flood disasters and determine the cost of flood protection for homeowners and businesses alike.
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FEMA claims higher insurance rates are needed for the sake of federal program’s sustainability
FEMA manages the National Flood Insurance Program, through which the majority of homeowners in the U.S. receive flood protection. According to FEMA, high rates are necessary in order to maintain the sustainability of the federal program. Rates have been growing quickly in order to help the program recover from its financial problems, but revisions to flood maps are compounding the financial impact of these growing rates, making insurance coverage significantly more expensive.
Higher insurance rates may cause economic damage in West Virginia
West Virginia officials have been petitioning the federal government, asking for the flood insurance issue to be resolved somehow. Homeowners are expressing their concerns for the financial pressure that higher rates are introducing, with some claiming that expensive flood protection is hindering their own financial stability. Furthermore, rapidly growing insurance rates may have a negative impact on the housing market, which could create significant economic problems for the state in the coming years if the issue is not effectively resolved.