On Wednesday, April 1, Florida residents can expect to see another rate increase for their flood insurance policies — and it might cause some pretty major sticker shock for many.
According to a March 25 KeysInfoNet article, flood insurance premiums could rise as much as 18% under the 2014 Homeowner Flood Insurance Affordability Act, which replaces the the 2012 Biggert-Waters Flood Insurance Act. For homeowners who live along the coast, rates could jump as much as 25%.
More than 5.5 million people across more than 21,800 communities hold flood insurance policies to protect against flood damage, which isn’t typically covered by homeowner’s insurance. Nearly two million of these policies are held by Florida residents, as floods are much more common here than almost anywhere else in the country.
And for these Florida residents, who are the prime targets in the federal government’s move to cut subsidized flood insurance in flood zones, the joke will be on them this April Fool’s Day.
“My insurance is more than my mortgage,” Nancy Loft-Powers, a resident of Deerfield Beach, near Fort Lauderdale, told the Tampa Bay Times. Currently, Loft-Powers pays $7,500 annually for her flood insurance policy. Under the April 1 increase, this annual fee would rise by an additional $750.
Congress pushed the rate hikes under Homeowner Flood Insurance Affordability Act to help reduce the National Flood Insurance Program’s $24 billion debt — a debt caused by claims from two devastating storms, Hurricane Katrina and Hurricane Sandy.
And as rising sea levels caused by global climate change begin to become an increasingly apparent reality — and hurricanes only grow more severe with each passing year — many say increasing flood insurance for those who live in high-risk flood zones is justified.
“These reforms need to happen,” said Shannon Hulst Jarbeau, assistant director of a Norfolk, VA-based nonprofit group called Wetlands Watch. “The rate increases drive an interest in adaptation to sea-level rise. It makes people start to understand the value of reducing flood risk because it hits them right in their pockets.”
For Floridians living along the coast, these insurance increases might not be much more than an added financial burden — but it might be the incentive that finally gets people to relocate out of harm’s way.
