New rates took effect on April 1 under the National Flood Insurance Program that increases individual policy premiums for homeowners in high-risk areas by as much as 25 percent.
Additionally, policyholders must pay new surcharges – $25 for owner-occupied primary homes and $250 for secondary or seasonal homes.
According to a spokesperson for the Federal Emergency Management Agency (FEMA), the average premium for flood insurance is $650 a year, but rates for some properties in high-risk areas will be much higher. About 5.2 million people have flood insurance policies; about 1 million of them will experience increased premiums.
The new rates are part of a plan to improve the financial standing of the program.
In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act to phase out federal subsidies for policies in high-risk areas. Last year, Congress passed the Flood Insurance Affordability Act which slows the impact of the rate increases for many policyholders.
A FEMA spokesperson said the average flood claim from 2008 to 2012 was about $42,000.
To learn more about this flood insurance rate increase, please call E. R. Munro and Company at 1-877-376-8676.
