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Insurance rates to soar in flood-prone areas


Published:   |   Updated: October 1, 2013 at 06:45 AM

Barring any last-minute changes in Congress, several measures in the Biggert-Waters Flood Insurance Reform Act will go into effect Tuesday.

The new law, passed by Congress in 2012, mandates that the National Flood Insurance Program remove lower rates known as subsidies on properties built before accurate flood maps were created.

The federal program, started in 1968, faces more than $20 billion in debt after major disasters such as hurricanes Katrina and Sandy.

While the changes apply to only about 20 percent of all policies nationwide, the Tampa Bay area will see some of the largest impacts in the nation, with more than 55,000 homes in Pinellas and Hillsborough counties seeing rates go up by a few hundred to several thousand dollars per year.

Here are some frequently asked questions about the impact of flood insurance reform on area homeowners.

Q: What types of properties will be affected by flood insurance premium increases?

A: The changes apply to older properties in special flood-prone areas built before their community entered the flood insurance program — generally, prior to 1974.

Q: How much will my flood insurance increase?

A: For primary residences, rates will go up by 16 percent to 17 percent each year after Oct. 1 until premiums reflect a full risk rate, which is calculated by the property's base flood elevation.

Properties sold after the passage of the new law in 2012 will see rates immediately increase to full risk rate when the new owners goes to renew their flood insurance policies. Rates will also jump if a policy lapses.

Second homes and nonprimary residences will see 25 percent annual increases until they reach full risk rate.

Tuesday, commercial properties and those that have had repetitive flood losses will begin to see rates increase by 25 percent annually until they reach full risk rate.

Q: How is my full risk rate determined?

A: A home in a flood zone at base flood elevation may pay about $1,800 per year, but the rate climbs substantially with every foot below that; for example, a home that's two feet below base flood elevation may pay about $6,400 per year, and a home that's six feet below that line could pay more than $15,000.

Q: How do I determine my base flood elevation?

A: Homeowners should obtain an elevation certificate, which must be prepared by a licensed land surveyor, professional engineer or registered architect. The cost may range from $200 to $500, according to the Pinellas County Property Appraiser's Office.

Q: Am I required to carry flood insurance coverage?

A: Only properties with a federally backed mortgage that are within special hazard flood zones are required to carry flood insurance. Homeowners without a mortgage are not required to carry it.

Q: How will this affect my property's value?

A: The property appraiser's office is still collecting data, but the prospect of unaffordable flood insurance rates has slowed home sales significantly in flood zones.

The Pinellas County Property Appraiser has requested residents submit their elevation certificates to help give an accurate assessment of their future property values. This information can be submitted by email to pam@pcpao.org, faxed to (727) 464-3448 or sent by mail to the Pinellas County Property Appraiser's Office, P.O. Box 1957, Clearwater, FL 33757.

Q: Will there be more changes to flood insurance rates?

A: Other properties that had enjoyed lower rates could see their rates go up in 2014 the next time their community adopts a new Flood Insurance Rate Map. Rates would increase by 20 percent per year for five years. New flood maps could also change special flood hazard zones, meaning some properties may be required to carry insurance, while others may not.

Q: What can I do to lower my flood insurance rates?

A: The Federal Emergency Management Agency advises homeowners to remodel or rebuild their homes to bring them up to modern flood codes, including the addition of vents to the foundation, breakaway walls or raising the base level. These steps could lower your premium.

Q: What is Congress doing about this?

A: Several bills have been introduced to either delay or stop the implementation of Biggert-Waters, but gridlock over the federal budget and the Affordable Care Act, known as “Obamacare,” have so far prevented action.

Q: Where can I get more information?

A: Visit the National Flood Insurance Program website at www.floodsmart.gov.

jboatwright@tampatrib.com

(727) 215-1277

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