Financial burdens increase as flood insurance costs grow
Health insurance is not the only kind of coverage that is undergoing significant changes in the U.S. Flood insurance has long been a problematic issue for many homeowners throughout the country, but this type of coverage has begun to attract more attention as homeowners and businesses begin to bear a larger financial burden. Friendly Insurance of Texas suggests that flood insurance rates for homeowners will grow, regardless of whether their properties are located in flood-prone areas or not.
Policies through federal program continue to grow more expensive
Flood insurance is well within the jurisdiction of the federal government. In the U.S., consumers can typically only find coverage through the National Flood Insurance Program. This federal program may account for the vast majority of flood policies currently active in the country, but the program itself has been suffering from crippling financial issues since the impact of 2005’s Hurricane Katrina. Over the past several years, flood insurance rates have been slowly rising in order to mitigate the program’s financial losses.
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Costs rise as financial problems persist
The National Flood Insurance Program is managed by the Federal Emergency Management Agency, which has been working to revise its flood maps in recent months. These flood maps determine which areas of the country are prone to flooding disasters. Properties located in so called high risk areas see higher rates for flood insurance coverage than those in low risk areas. In some cases, revised flood maps are leading to a 30% increase in flood insurance rates in some parts of Texas. Similar rate increases have been reported in other parts of the country.
Lawmakers unsure of how to address cost issue
Homeowners have been expressing their concerns regarding higher flood insurance rates. Thos outside of traditionally designated high risk areas are beginning to feel significant financial pressure from the rising cost of flood coverage. While federal lawmakers have been working to address several issues regarding the National Flood Insurance Program, many legislators have not yet determined what action to take on the matter of rising insurance rates.