Realtor Bob Preston has lived on New Hampshire’s seacoast his entire life and his family has sold and rented properties there for decades. He’s never had a property flood but still pays for federally mandated flood insurance.
Like thousands of others across New Hampshire whose flood insurance is subsidized by the government, the amount he pays is about to go up.
President Barack Obama signed a law on March 21 putting the brakes on a 2012 overhaul that aimed to shore-up the National Flood Insurance Program by requiring policyholders to begin paying risk-based rates.
But the measure merely delays the premium increases that will hit as many as 1.1 million policyholders across the country, including nearly 3,800 in New Hampshire, according to an analysis by The Associated Press.
More than 40 percent of the properties with flood insurance in New Hampshire will see their costs go up. Homeowners will see their rates go up as much as 18 percent each year and owners of businesses and second homes will face an annual mandatory 25 percent rate increase until they switch to a risk-based rate.
The affected properties are mostly in Hampton but also found in communities far from the coast, like Keene and Coos County.
“We’ve gotten a couple of calls from people buying homes,” said Jennifer Gilbert, New Hampshire’s coordinator for the flood insurance program. “They’ve had a bit of sticker shock.”
She said that Hampton single family properties in a low risk area can have an annual premium as low as $300 while a higher-risk policy could carry an annual premium of $1,100. Preston, though, has premiums on some commercial properties in the $3,400 range that will go up 25 percent annually.
It isn’t clear yet how the Federal Emergency Management Agency, which administers the program, will implement the rate hikes. If FEMA raises rates by an average of 15 percent each year, someone now paying $1,300 annually for flood insurance — about average for a subsidized premium in a high-risk flood zone — could pay twice that amount in five years and more than $5,000 annually in 10 years.
Preston said the increase is a jolt and — for most along the seacoast — an unneeded one.
“Frankly, the numbers that some of the people are talking about are scary to some people,” Preston said. “If people are fortunate enough to have had a house for a long time, they’re going to get bills that they’re not used to.
“I understand I’ve got to have it because you never know. But for a lot of people, I think it’s unnecessary.”
The state is not immune from flooding: There was serious flooding in parts of the state after storms in 2005, 2006 and 2007.
It’s that “you never know” factor that drives all insurance. In New Hampshire, the 9,460 property owners paid a combined $8.9 million in premiums last year while 9,312 policyholders paid $8.2 million in 2012. The program has paid out $48.1 million in New Hampshire claims since 1978.
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