Hurricane season in our region is still a few months away, but homeowners are already feeling the costs of potential flooding from severe storms. Federal officials recently announced that insurance premiums for flood protection will increase this year.
According to a recent claimsjournal.com report, the Federal Emergency Management Agency (FEMA) said premiums will increase about eight percent. In monetary terms, the average flood insurance policy will cost $935.00 per year, which is up from last year’s average of $866.00. Combined with surcharges that some homeowners will be required to pay, an average premium will cost $1,062.00.
The average increase may pale in comparison to some homeowners, especially those who own vacation homes. Those who own second homes and properties in repeated flood areas may see increases of up to 25 percent. The same may apply to commercial property owners.
The National Flood Insurance Program provides insurance to more than five million homeowners and must be periodically reauthorized through federal legislation. The current program is scheduled to expire in July and it is currently $25 billion in debt. As such, premiums are expected to increase to make up for the shortfall.
Changes in flood insurance premiums are not only important to homeowners, but to the insurers who are charged with providing coverage in the event of a natural disaster. Indeed, insurance premium changes invariably lead to litigation. In these situations, an experienced insurance defense attorney can defend an insurer’s interests.
In the meantime, legislation introduced in Congress to limit such increases has made little progress.