House Passes Flood Insurance Bill; Key Senators Sign On

By Andrew G. Simpson | March 4, 2014
Flood Warning

  • March 4, 2014 at 11:05 pm
    Chuck Candler says:
    Hot debate. What do you think?
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    Can someone explain to me why I am paying to subsidize the premiums for those who can afford a beach front home?

    • March 5, 2014 at 8:05 am
      Trish says:
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      Let me tell you, it is not just the rich being slammed! I bought an $80,000 home – not on a beach, lake, pond or river – to live within my means. There is a drainage easement behind my property, that’s it. My neighbors have lived there since mid 70′s with no floods, yet it is in a high-risk zone. My flood insurance went from $1300/yr (still high) to an outrageous $4100/year. If I hadn’t found a private company to insure me, I would have had to move, as I couldn’t afford another $200/mo. on my mortgage. This hike would start the next rush of foreclosures, and people would have to walk away from their “unsellable” homes!

      • March 5, 2014 at 8:56 am
        GL GUHRU says:
        Hot debate. What do you think?
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        You are subsidizing those building in areas where they shouldn’t

        • March 5, 2014 at 9:14 am
          jack says:
          Hot debate. What do you think?
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          GL GUHRU- stick to GL because your flood knowledge is lacking. The hardest hit are home built Pre-FIRM. That’s home built prior to FEMA making flood maps and telling people how high to build. You are NOT subsidizing those “building”.

      • March 5, 2014 at 9:02 am
        LiverFree says:
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        It doesn’t matter who gets the subsidy the fact remains almost any subsidy from the government is bad for the economy. They are always fueled by deficit public programs that the taxpayers have to pay(aka the middle class) and they also distort the free market by creating misallocation of resources to bound to fail investments/programs. This misallocation steals from other private businesses (the unseen consequences) to fund public programs that are inherently insolvent.

      • March 5, 2014 at 9:48 am
        Original Bob says:
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        Interesting point about getting a private company to insure your home’s flood risk. Does anyone know why more private companies are not entering this market and cherry picking the low flood risks? And if people can opt out to a private company doesn’t that increase adverse selection in the NFIP and further increase the deficit?

      • March 8, 2014 at 4:52 am
        Troglaton says:
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        This is obviously bogus because 4100/12=360 not 200 it’s just another example of rhetoric.

        • March 10, 2014 at 9:47 am
          Libby says:
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          I think the $200/month is the price for force-placed coverage through his mortgage company.

        • March 10, 2014 at 2:14 pm
          Ins202 says:
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          No, the $200 is the additional amount she’s paying. $4,100 -$1,300 = $2,800 / 12 = $200 per month (rounded).

      • March 8, 2014 at 11:05 am
        Bean789 says:
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        I am currently looking for property and find that the first thing I check before I go and look at anything is the FEMA code for that property. No, I do not look at anything with an A,E or high risk area. I also check to see if it is located near a pond, creek, or small river even though FEMA says code X. Don’t want to risk being rezoned in the future. I also found out that if you have an elevation certificate on file, or obtain one and you are above the BFF, you can apply to FEMA to be rezoned and your insurance company will have to abide by the rezoning. As for your drainage easement, have you considered the cost of a levee for your property in order to protect you home? My parents did this for their property. They simply brought in gravel and dirt and concrete chunks obtained from a torn down building for a total cost of $5K and now….their flood insurance rates dropped dramatically. Many options out there for some while others remain at the mercy of FEMA and their insurance companies. Also, the county where you live is probably required to dig out that drainage area at least every 2 years. Stay on them if that is the case, and make sure they do their jobs.

      • March 10, 2014 at 3:08 pm
        Mary says:
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        Trish,
        I am in the same boat, can you let me know the private company?

    • March 5, 2014 at 8:31 am
      jack says:
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    • March 6, 2014 at 1:30 pm
      bob says:
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      read the comment from Trisha below you.

  • March 5, 2014 at 6:32 am
    Sasha says:
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    Beachfront properties were not all that was hit by huge increases in flood insurance. The hard working middle class were hit hard by this act as well. I was planning on purchasing a small Garden Home that sits 40 feet above a small creek that has never flooded and was built to code in 2008 and by the flood maps at that time. It is only 1600 sq feet. The property is over 4 hours from any coastal areas and was just recently put into a high risk zone in 2013. The current owner was paying for flood insurance at $388 per year as it was not built into a flood zone at the time it was built. If we had purchased this home our flood insurance rate would have been $6,500 per year. Does this seem reasonable to you for coverage of $150,000 for the structure only in a city where the median income is $60,000 for an average household. The homeowner was not able to transfer her policy to us due to the BW-12 act so we have no choice but to back out of the deal. My husband and I have always played by the rules, paid our taxes and this seems unreasonable for a community that has never flooded. I do not mind paying my fair share into a community I dearly love but $6,500 was too much. This also hurts the current owner who will not be able to sell her house unless there is some relief by this bill. She is a widow that lost her husband to cancer and she might even lose her house.

    I cannot speak of Beachfront property but before this experience I did not know how the BW-12 act was hurting people that live no where near the Coast. It was something I never looked into in my small community but I wished I had looked into before I went house hunting. It was my small dream house and I would still love to purchase it but I am afraid we have no choice but to walk away at this time. So all I ask is that people keep a open mind about this bill. My story is one of many that do not live near the coast.

    • March 5, 2014 at 11:06 am
      okt0ber says:
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      That means your agent did the quote wrong. You should be grandfathered to the prior maps (Maps in force when the house was built.). Feel free to contact me and I would be more than happy to take over that account for you!

      • March 6, 2014 at 8:11 am
        Andy says:
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        He was quoted correctly. Under Biggert-Waters all grandfathering is removed when a house is sold. Didn’t you read the article? This is the injustice that people are talking about. This is not a made up story or the mistake of some insurance agent. These are the real quotes from the NFIP.

        • March 6, 2014 at 9:58 am
          Pat says:
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          No, that is not exactly true – while “grandfathering” and assuming policies was taken away as of 10/01/2013 for Pre-FIRM dwellings – it is still possible to assume Post-FIRM policies for now. If this house was, indeed, built to code in 2008, and has a policy in force, they could have assumed the present policy owners policy.

  • March 5, 2014 at 8:25 am
    Nan says:
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    I had a client who did not get the elevation certificate done before his January policy expired. Once it was done, it resulted in his premium going from $1328 to $2591…. however, before he could finalize and pay the bill his lender put forced placed coverage on him for $974 per year. His family has owned the property for 45 years without a flood and he only bought flood insurance because he took out an equity loan. Although the forced placed coverage will only pay the mortgagee back if something happens, the insured has decided to just pay the $974.

    What a crazy situation but it sure allows our lazy congress to just keep getting paid for doing nothing productive. How many of us could waste time passing a law then waste more time trying to overturn it? Ineffective but expensive congress. Just think, they get paid $476.71 per day every day of the year. No wonder they work so hard to get reelected.

  • March 5, 2014 at 9:00 am
    GL GUHRU says:
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    If they had used more precise risk based pricing I bet these other examples stated here would not be as high. Antoher example of the govt screwing up in insurance.

  • March 5, 2014 at 9:04 am
    Tom says:
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    This “New Proposed Legislature”, known as Grimm-Waters Bill, does exactly the opposite that the Biggert-Waters Act was designed to do…and what was that…to stabilize and pay down the 27.5 BILLION DOLLAR debt the National Flood Insurance Program is currently facing…..
    Would someone please explain Three (3) Questions:
    “If enacted into law, this legislation will provide homeowners living in flood-prone regions with clarity and certainty that the cost of their insurance will not force anyone from their homes, lead to depressed home prices, or undercut their ability to buy or sell a home “, Said Rep. Waters….
    How does this bill correct those policy holders that are required to have in place flood insurance (Mandatory Purchase – loans) and are part of the 1% that are causing all of the losses. What is the incentive to make corrections if for a “marginal investment-yearly premiums” I receive maximum payouts over and over again…..
    Second question which is Two (2) Parts:
    “Refunds: Requires FEMA to refund policyholders for overpaid premiums”…where is this money coming from…the “Non-Existing Surplus” …another GREAT example of Congress’s thinking…if we are in debt $27.5 Billion Dollars now, paying this back by creating additional debt?
    What will be the process for this payback and in what timeframe?
    Third and final question:
    When the Biggert-Waters Reform Act was presented, MS Waters was the sponsor…. At the time of passage, she touted this was the greatest piece of Legislation that NFIP ever saw…..now we have Ms. Waters presenting the polar opposite Legislation denouncing her previous Legislation…and explaining that she did not know or understand what was originally presented…..I guess my question now is…what changed???

    • March 11, 2014 at 12:13 pm
      patti says:
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      Everyone’s premiums went through the roof, mine included, that’s what happened. People who never flooded or were affected by Sandy still had to have their premiums ridiculously increase (mine went up 50%; never had a flood in my house, only half of property in food zone), and all those people knew Maxine Waters’ name and contacted her….. that’s what happened…..

      • March 17, 2014 at 2:17 pm
        STG says:
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        Patti, I was in the same boat as you. My house is near a mountain – the nearest coast is 5 hours away, the house is over 100 years old with no claims against it (no floods in the area) and yet my premiums went up from 400.00 a year to over $2000.00 a year because suddenly my area was considered “high risk” due to some arbitrary new map that FEMA decided was appropriate for my area. Our home isn’t even on the east coast, so the bill had horrible flaws as it was originally written

  • March 5, 2014 at 10:39 am
    Ryan Johnston says:
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    • March 5, 2014 at 1:06 pm
      SWFL Agent says:
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      Ryan, is this the first article you’ve read on this? We don’t want subsidies, we want correct rate calculations. And FEMA hasn’t proved they can do that.

    • March 5, 2014 at 2:57 pm
      jack says:
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      Ryan- you sir are a racist. For you to think it’s only the white upper class being hit with these premiums.

    • March 5, 2014 at 10:48 pm
      Pete says:
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      Have you looked at how much Floridians have paid in premium vs what has been paid in claims? I think we have paid $4 for every $ 1 paid. You should read deeper than what it presented in the press

  • March 5, 2014 at 11:12 am
    b says:
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    this whole discussion merely reinforces the philosophy that THE GOVERNMENT SHOULDN’T BE IN THE INSURANCE BUSINESS.
    If from day one the feds had kept their hands off and let the problem work it’s way thru the private sector then those of us in non-flood areas wouldn’t be involved in this discussion. and if the priviate insurance industry wasn’t able to step up at the time, then we wouldn’t be having this problem, would we? you would have either built/bought your flood risk property for cash, or done without.

    • March 6, 2014 at 4:39 pm
      J.S. says:
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      b: In 2005, hurricanes caused a total damage of over $170 billion dollers. This, of course, was the result of multiple storms. While much of the flooding was not covered by insurance,this is the cost of the damages.

      You want the government out of the insurance business. Do you really believe that private insurers are willing to risk over $200 billion in surplus to provide flood insurance on all properties subject to flooding should another similar year happen?

      How frequently do the Mississippi and Colorado Rivers flood causing damage over a hundreds of miles including cities such as St. Louis,Kansas City, Omaha, New Orleans and others. Where do you find private insurers willing to deal with these losses?

      While I appreciate your sentiment, it is simply not feasable for the private insurance industry to provide adequate insurance to cover the widespread damages caused by some flooding events.

      • March 6, 2014 at 4:55 pm
        Libby says:
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        I think that’s the reason for NFIP in the first place. I think there is a need, but there is also a need for transparency and accountability of the program.

      • March 8, 2014 at 10:48 am
        Bean789 says:
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        Not all of those 170 billion dollars in damages were from flooding. Most of it was due to downed trees falling on homes or roofs ripped off, which resulted in rain coming in, which FEMA did not designate as ‘flooding’. We are talking about FEMA rezoning properties that have never flooded, no where near a water source that has flooded, and the insurance companies capitalizing on homeowners who are at the mercy of FEMA. I live in Florida and have seen the ‘relief’ homes FEMA brought into our state for people who had no where to go. That was 2005 and those homes are still sitting on a lot, ready to go, over 500 of them….paid for by FEMA and never used by anyone. Wonder how much of their budget went for those homes and why they were never utilized to people who needed them either then or after Katrina and Sandy? Maybe FEMA and the individual states should stop allowing residential development of property that would cause blockage or diversion of current creeks to flood what were once flood free areas. Hmmm….who are the real culprits in all of this?

        • March 20, 2014 at 11:44 pm
          Murkle says:
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          Bean789: I understand the popular urge to jump on the insurance companies that sell the flood insurance for the NFIP & claim they are making a killing. I to know very few poor insurance agents. However, you need to research how much of a fee the insurance company receives from each policy sold. All monies go to the NFIP EXCEPT for a very small fee of $35-$75 paid to the insurance company. Many insurance companies are no longer selling the flood insurance for the NFIP as it isn’t worth their time.

  • March 5, 2014 at 5:29 pm
    Kelly says:
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    Beachfront properties and the rich are not the only people being affected by this. I have a home on 7 acres in landlocked Pennsylvania…I have a creek that runs through the back end of my property, a full 5 acres away from my house. My rates went from $1725 per year, to $23726…per year. A $22,000 increase. When I called FEMA to ask about the table they were using to figure this, the girl asked how far away from the ocean I lived. Are you kidding me?? And lucky me, I bought this house after the retroactive date of July 2012. Had I known that this was going on, had I been made aware that the possibility of this happening was a real threat, I never would have bought it.

    • March 6, 2014 at 8:08 am
      john says:
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      Dido Kelly, same story in Lancaster pa. we bought our property after the law was passed but before it was enacted. No where in the buying process was Biggert Waters made known. Not buy the seller, bank, or the insurance company writing the policy. I Never would have bought the place if the facts had been disclosed.

    • March 8, 2014 at 5:15 am
      Troglaton says:
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      Prove it I don’t believe you actually had a renewal offer at that rate unless you were a new buyer or repeat loss.

      • March 10, 2014 at 9:50 am
        Libby says:
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        He has no way to prove it to you. Why do you call someone a liar when you have no basis for doing so?

  • March 5, 2014 at 5:33 pm
    InsGuy says:
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    you gotta love the name of the bill…”the GRIMM-WATERS” bill.

    Ha!

    • March 5, 2014 at 6:10 pm
      jack says:
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      And Waters was for it before she was against it.

  • March 5, 2014 at 10:44 pm
    Pete says:
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    The NFIP has taken in more premium than it has paid in claims since the programs inception. It is not in debt because of Katrina and Sandy. The program is in debt because congress spends the money in years without losses. No money builds in good years. Why hasnt the press piicked up on this? The program is not a true insurance pool with reserves and investments. It was designed to offset the Federal govts expense during declared disasters caused by flood. I own a property near a beach. The structure is valued at $75k on the tax rolls. My insurance agent was estimating $42,000 annual flood premium. Do you think I would pay that? Hell no, I’ll take the forced placed insurance. One other point, I manage money for wealthy individuals. Multi million dollar beachfront properties are not buying flood insurance. The one that I know of that carried a mortgage paid it off and cancelled his insurance when his new premium came in.

    • March 6, 2014 at 8:17 am
      Andy says:
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      ^This. The problem is government mismanagement of funds.

  • March 6, 2014 at 12:41 pm
    jack says:
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    pst…pst… here’s a secret. The bill can’t be fixed just like obamacare. You had a bunch of idiots write the bill and now you expect the same bunch to fix it? Repeal both!!

  • March 6, 2014 at 3:07 pm
    Maria says:
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    What about the customers would could not afford to purchase the flood elevation certificate and their renewals were not offered? Will FEMA go back to Oct 1st and now re-offer all of these people a renewal? Too many unanswered questions…..

  • March 6, 2014 at 3:09 pm
    Maria says:
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    What about the people who could not afford the flood elevation certificates, FEMA did not offer them a renewal….will they go back to Oct 1st and now offer them renewals? Too many unanswered questions.

  • March 6, 2014 at 3:53 pm
    Leroy T says:
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    Hopefully, the US gov’t will start passing the risk on to the capital markets, where there is very strong demand for ILS/cat bonds.

    It’s the best case solution for US taxpayers, home owners, and ILS investors.

  • March 6, 2014 at 7:13 pm
    tom says:
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    In response to Maria’s question….what about the individuals that were forced to walk away from these homes because of these rates….is Congress planning to replace these homes????

  • March 6, 2014 at 7:15 pm
    tom says:
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    If the congress requires the payback of these rates, will the Agent be required to payback their commission?
    Bad bill Agents pay…seems fair to me….and the consequences for congress????

    • March 7, 2014 at 1:02 pm
      Maria says:
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      Yes, Agents will be required to return commission. They deduct from next commission statement. And yes, unfortunately, too many people have already walked away from their homes and something needs to be done about this. I am not saying that a premium shouldn’t be paid for those in flood zones and for those who constantly get flooded. However, the BW12 act also penalized many more. Homes that didn’t require a flood elevation certificate now do and those rates have skyrocketed. Not only did they have to pay $800 for the certificate or they would not have been offered a renewal, but their rate tripled. And this is for a home approx. 1 mile from the water…. Sandy in some areas was considered a 100 and 200 year storm….why should those that have never been flooded and are further than a mile from water be penalized? Congress/Senate should sit in a room with Insurance Agents, homeowners and the underwtiters from FEMA so they can have a better understanding of what happens in the real world!

  • March 6, 2014 at 7:19 pm
    tom says:
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    If everyone would look back in time and reflect on Congress’s directive to FEMA on reducing or removing the repetitive loss properties from the roles of NFIP we would not be in the situation we are in now…. Look at the States that have the highest amount of claims and payments….what have they or their FEMA Regions done to correct the growing situation…..Last thought….
    Where can you Run a company or program into a 27.5 billion dollar debt and one, still be employed…but better, get promoted….only in FEMA

  • March 6, 2014 at 8:43 pm
    GeorgeKasimos says:
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    Facts;
    - only 44% of our premiums go toward paying of our claims. 56% goes toward FEMA/NFIP administrative costs.

    - 40% of homeowners in a Flood Zone, that have a Federally backed mortgage, that are required to purchase flood insurance – DO NOT.

    - 1% of “Severe Repetitive Loss” homes account for 33% of claims paid to date. Over $17 Billion dollars. One SRL home in Humble, TX, worth $118K, received over 2 Million dollars in claims to continually rebuild their homes.

    We need to fix FEMA first

    Please join us to stop the exorbitant rise in flood insurance premiums.

    • March 8, 2014 at 3:27 pm
      Gat273 says:
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      Source this please…

  • March 7, 2014 at 3:15 am
    Kenneth Streiff says:
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    The end of the Federal involvement in flood protection insurance is in sight. This bill bankrupts the program. Everyone wants lower premiums, lower taxation rates etc. and greater coverage. Couple that with coastal changes due to anticipated sea level changes, as the antarctic ice sheet continues to melt at an accelerated rate, this means inability to insure or sell these self-same homes many years earlier. Global sea-level changes are really happening, and this bury-the-head-in-the-sand approach is self-destructive. Yes, it is a bitter pill to swallow: your beachfront property is gonna be unsaleable and under water. Katrina and Sandy were a warning, the real deal is coming. Ditto for slow-draining farmland areas. The hundred-year flood plain is gonna be a LOT higher than today.

    • April 11, 2014 at 7:17 am
      Vince b says:
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      ken..and soon your house will be unsaleable due to fire,landslides,earthquakes.avalanches etc,…give me a break and stop huggin’ trees. The earth will always be changing as it has done for thousands of years.

  • March 7, 2014 at 3:26 am
    Kenneth Streiff says:
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    The original 2012 version was on better financial footing than this bill for the simple reason that anticipated flood claims are rising astronomically with no end in sight, so flood premiums should be doing the same. The reason is the anticipated payouts for all of Miami. New York City, New Orleans, Houston, just to name a few glaring examples of cities under water by 2114. But it is more politically expedient to ignore these facts because of the ability to for now pass the cost on to those unaffected by this man-made disaster. Good luck with that ten years from now.

  • March 7, 2014 at 7:57 am
    Paul Toscano says:
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    I live in a pre-firm home. My insurance premium two years ago was $343 for the year. Last year it was $902. This year I received a renewal bill for $3083 based on a balance of a home equity loan of $77,000. I live in an area that was always a low risk flood zone, Zone C. The zone has changed to AE. I have lived here for 42 years and have never flooded or ever filed a claim. I have filed a Elevation Certificate and my surveyor also submitted a LOMC. This has been an additional financial hardship. Seems to me someone should look into the claim history of a residence and charge accordingly. Writing a $3000 check for flood insurance is like paying taxes for the third time in one year. I have never commented via email before, but this time I’m pulling out all stops. I’m a senior on a fixed income who would rather give $3083, if I had it, to my three grandsons toward their college funds. HELP!

    • March 7, 2014 at 9:20 am
      jack says:
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      I hope you don’t have your home insured for the loan instead of the replacement cost value because you are going to suffer a big fat penalty at the time of loss if you have one. Based on your history your flood premium should be $1, unfortunately ins premiums are based on the law of shitz happens.

    • March 26, 2014 at 9:24 am
      Jane says:
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      If you went from a low risk ( x,b,c,d) to a high risk zone( A,AE etc) after 10/1/2008 call your agent, If you have not had multiple losses you should be on the PRP extension which is less than $500.

  • March 7, 2014 at 8:17 am
    Phyllis Katz says:
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    Hello,
    I have gone through one house that had 6 foods and each time had to rebuild and rent as I am retired abnd it was my investment property that is now gone due to Irene, I also have another investment home
    that never flooded before and now had one flood and brokers will not even show it due to these flood
    laws. I rebuiolt after Irene and put in all my savings to build a higher room called a Future Flood remidiation room and FEMA does not even count that. If somebody were to buy this home which
    will probably not ever flood again, they must go by the map which is in place on the area where nobody
    else built this room which was done only before the new laws so I could sell my house. A new insurer
    would have to be a cash buyer and that is rare in my area soooooooo, there are many stories that
    will be told as many people like I face bancrupcy due to these laws and led perfect lives prior to
    the global warming situation.
    Hopefully the laws will be reversed, I am lucky enough to be able to hold out another year.

  • March 8, 2014 at 5:39 am
    Troglaton says:
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    The national flood program needs to be placed on a more actuarially sound premium structure if it is ever going to have black ink on its balance sheet. Unfortunately this is not a simple issue any more because we have had 45 years + of subsidies and some of these are quite substantial. Those same subsidies have enabled folks to buy homes in places with risk characteristics which could be addressed structurally but have not been because the subsidized NFIP rates created an easy means of transferring the risk. Given this environment developers had continued to build in risk Aeneas with little thought to the potential for loss because the risk could cheaply be transferred to the NFIP.

    One of the real issues here is that there is no real understanding of just what the definition of a subsidy really is. A subsidy is any artificial pricing scheme to create a price lower than the market price. That was the goal of the program from day one. Create affordable flood insurance coverage where the private sector had not ventured to do so. The reason there had been no development of an affordable private sector source of this kind of coverage in the high risk areas is the private sector had to set premiums too high and it was a disincentive to purchase. Coincidentally it was also a disincentive to develop or to continue to rebuild and live in high risk areas.

    For now it seems that society is content to continue to finance a skewed risk picture by deficit spending.

  • March 9, 2014 at 11:06 am
    linda says:
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    “According to the Congressional Budget Office, the House bill would have no effect on the NFIP’s finances over and would pay for itself as it includes annual reserve fund assessments of $25 a year for primary residences and $250 a year for businesses and vacation homes.”

    So if you have a vacation home, we will limit the rate increases and charge you $250 assessment a year instead? And I’m willing to guess that the increases on that assessment are not limited? Also, how is it justified to charge homeowners $25 assessment and vacation home owners ten times as much? I am currently paying $600 a year for my flood insurance, the $250 assessment represents a 40% + increase on my costs without taking into account the actual increase in the flood insurance premium!

  • March 9, 2014 at 11:50 pm
    linda s. says:
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    capping at 18%??? and that is supposed to make us feel better? i think 10% is more appropriate. i got the sticker shock this year for the first time in almost 20 years in this house. and it was a 10% increase. was not expecting it. well, i also wasnt expecting my car insurance to go up 17% (about $300) in the last year either. and my regular home owners went up 18% as well. a bad year for insurance and making ends meet.

  • March 9, 2014 at 11:52 pm
    linda s. says:
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    my first attempt at posting a comment didnt work i see. i got a 10% increase in flood this year, for the first time in 20 years. sticker shock. and an 18% increase cap is supposed to make us feel better? absolutely not. it will drive people to not own homes anymore. i also got a 17% increase on auto insurance and regular home owner’s insurance this year as well.

  • March 10, 2014 at 8:58 am
    Reality_Bites says:
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    It’s high time people accept their risks. It is more unfair to burden the responsible tax payers who have chosen to live in non-flood prone areas to pay to rebuild some rich guy’s beach house. I’ve seen it after every hurricane that hits my home town. It sickens me. The country is going broke, the NFIP is in debt, and individual citizens want no accountability. The system is broke – BW12 seeks to fix it and place the responsibility with those who make risky decisions.

    • March 10, 2014 at 1:40 pm
      journey7 says:
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      You are so mis-informed. Not surprising — most people are, particularly on this subject. The NFIP does NOT rebuild “some rich guy’s beach house.” The coverage provided is capped at $350,000 — and if an area repeatedly suffers significant destruction, FEMA redraws the flood map for that area and NFIP will not issue a policy. If the property is rebuilt, three things are necessary: 1) PRIVATE insurance at full replacement value which the homeowner pays for without federal subsidies — OR enough wealth to cover the replacement cost “out of pocket”; 2) A FEMA flood map which ALLOWS the owner to rebuild where a property has been destroyed; and 3) Local building ordinances & codes which require structural characteristics that meet or exceed FEMA requirements to reduce the risk of property damage. Other factors: Banks DEMAND insurance coverage to protect THEIR interests. If you can’t get insurance, you can’t get a mortgage to rebuild. If the lot you want to rebuild on does not meet minimum standards, you can’t get building permits to rebuild. Insurance rates for second homes are higher than for primary residences because an un-occupied house is more at risk than one which is occupied. If a second home is rented on a short-term basis, the insurance is higher still.

      The net effect of BW12 was not a “fair distribution of risk” — as Waters belatedly realized. In its original form, BW12 gave the federal government the power to re-write flood maps any way they wanted and radically increase premiums based on those (self-serving) maps. It literally stands as a perfect example of “A government that can give you everything you want is capable of taking everything you have.” The result was felt not only by beachfront owners, but along every river, stream, creek, and drainage canal in the country. If you lived within a mile or so of water whose level was subject to fluctuation due to storms, you were faced with crushing flood insurance premiums. People whose homes had never flooded were unable to sell their property because the new owner would have to pay, in some cases, $20,000+ a year for flood insurance.

      FEMA is re-drawing maps based on the proverbial “100 year flood” scenario and “The Katrina Effect” and applying that as an average yearly risk in order to include as many homeowners as possible in the NFIP and “spread the risk.” That works ONLY when a number of insurance companies are “sharing the market” — i.e.: competing for customers. However, the government doesn’t compete — it MANDATES (see Obamacare) based on agenda-driven policies. The whole issue was skewed totally out of control by two “hot” policies: One being class warfare (everyone loves to hate the “rich guy”); the other is global warming. As a direct result, far more middle class families are hurt than the “rich guys” (who were, BTW, already bearing the majority of the risk of owning waterfront property).

  • March 10, 2014 at 2:32 pm
    journey7 says:
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    You are so mis-informed. The NFIP does NOT rebuild “some rich guy’s beach house.” The coverage provided is capped at $350,000/claim. If an area repeatedly suffers significant destruction, FEMA redraws the flood map for that area and NFIP will not issue a policy. If the property is rebuilt, three things are necessary: 1) PRIVATE insurance at full replacement value which the homeowner pays for without federal subsidies — OR enough wealth to cover the replacement cost “out of pocket”; 2) A FEMA flood map which ALLOWS the owner to rebuild where a property has been destroyed; and 3) Local building ordinances & codes that meet or exceed FEMA requirements. Other factors: Banks DEMAND insurance coverage to protect THEIR interests. If you can’t get insurance, you can’t get a mortgage to build or rebuild. If the lot you want to rebuild on does not meet minimum standards, you can’t get building permits. Insurance rates for second homes are higher than for primary residences because an un-occupied house is more at risk than one which is occupied. If a second home is rented on a short-term basis, the insurance is higher still.

    The net effect of BW12 was not a “fair distribution of risk” — as Waters belatedly realized. In its original form, BW12 gave the federal government the power to re-write flood maps any way they wanted and radically increase premiums based on those (self-serving) maps. It literally stands as a perfect example of “A government that can give you everything you want is capable of taking everything you have.” The result is being felt not only by beachfront owners, but along every river, stream, creek, and drainage canal in the country. If you live within a mile (+/-) of water whose level is subject to fluctuation due to storms, you are faced with crushing flood insurance premiums. People whose homes have never flooded are unable to sell their property because the new owner would have to pay, in some cases, $20,000+ a year for flood insurance for a home that has never been flooded!

    FEMA is re-drawing maps based on the proverbial “100 year flood” scenario and “The Katrina Effect” and applied that as an average yearly risk in order to include as many homeowners as possible in the NFIP to “spread the risk.” That works ONLY when a number of insurance companies are “sharing the market” — i.e.: competing for customers. However, the government doesn’t compete — it MANDATES based on agenda-driven policies (see ObamaCare). The whole issue has been skewed totally out of all bounds of common sense by two “hot” policies: One being class warfare (everyone loves to hate the “rich guy”); the other is global warming. As a direct result, far more middle class families and fixed income seniors are being hurt than the “rich guys” (who were, BTW, already bearing the majority of the risk of owning waterfront property).

  • March 17, 2014 at 2:43 pm
    jack says:
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    Wait until they get YOUR health insurance (health careless).

  • March 28, 2014 at 10:17 am
    Melissa says:
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    Together with my ex-husband I own a home that unbeknownst to us has always been in a flood zone. We found out that we are in a flood zone because we have been trying to sell the home but due to the flood insurance fiasco we can’t even give it away. I approached our lender who looked me in the eye and said that back in 2006 many lenders were “lax” on requiring flood insurance and pushed through the mortgages without flood insurance. They turned the other way. They also told me that they would not require us to go out and get flood insurance now because they have a 3rd party certificate showing that we are not in a flood zone and that covers the bank. Great, thanks. How does that help me? We are now facing foreclosure due to the fact that my ex husband lost his job and I can no longer afford to make the mortgage pmts without child support to supplement my income. Nothing like getting screwed by a bank and the government! Morale of my story: do your own research and NEVER trust anyone.

  • April 30, 2014 at 12:39 am
    Lfpian says:
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    There is another part of the Flood insurance program that creates a negative impact. It is called the “Substantial Improvement” clause. If your property is in a flood zone (A or V) you cannot make any improvements or repairs that exceed 50% of the market value unless you bring the property to full compliance with current FEMA construction requirements! These requirements are especially onerous if the property is in a “V” zone. With a depressed housing market, you may have very room of improving your property and this depresses the market even more! You can do a Google search on “FEMA Substantial improvement”.

  • May 20, 2014 at 8:20 pm
    Riograndegirl says:
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    I live in the high desert at an elevation of 4888 ft. Our river is the Rio Grande which would be considered a crick in comparison with the rivers back east. We get 4.5 inches of rain/year. And we are in an AE flood zone! The last flood around here was 20 miles south in 1968 and was caused by a negligent city that didn’t clean out rain gutters so that is the justification that we get for a premium of $1800/yr.
    FEMA and NFIP are just an example of gross negligence of our government and our elected officials who fail to represent anyone but themselves and special interest groups. I’ve heard comments from lawmakers that they hadn’t read the whole bill but I’m sure they read how big their raises were when they passed their pay increases.
    I know that many people would consider $1800/ yr cheap but when there is no water, no river and no history of flood in our area, this is a bogus fee that is mandated by people who really could care less about what it does to the everyday homeowner/taxpayer.
    I was appalled when we looked at homes in Oregon, on the coast, within 5 miles of 4 rivers and 6 lakes, a couple hundred yards from the ocean in an area that gets 74 inches of rain per year and it was not in a flood plain.
    Who are the idiots that thought that one up?!?!!
    What is wrong with this picture?

  • June 22, 2014 at 10:08 am
    Rich says:
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    The first act passed, was to get FEMA out of the red, by requiring home owners close to water pay higher rates. Then FEMA spends the money on emergencies elsewhere draining the supply again. Then it’s back to the high risk property owners for more money. Then they have no reference point here to survey from, just place the whole area in a higher flood zone and charge them new higher rates. Sorry for the resale value on your creek side property.



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