Local News
9:52 am
Mon March 24, 2014

Flood Insurance Rates Expected To Rise With Changes in Federal Program

Credit creative commons

FEDERALSBURG, Md. (AP) - Changes in the federal flood insurance program are likely to mean higher premiums for thousands Maryland residents, and not just those living in Ocean City or along the Chesapeake Bay.

For years, the federal government offered subsidized flood insurance on homes and businesses. But discounted premiums and  catastrophic storms in recent years have left the National Flood Insurance Program deeply in debt, prompting Congress to pass a law two years ago requiring policyholders to start paying rates based on their true risk of flooding.

Records obtained by The Associated Press from the Federal Emergency Management Agency show that of the more than 73,000 flood insurance policies in effect in Maryland as of December 2012, some 12,000, or 17 percent, have been subsidized in the past and are facing rate increases.

Delaware

ELSMERE, Del. (AP) - Changes to the National Flood Insurance Program are bringing significantly higher premiums for thousands of Delaware property owners.

Records obtained by The Associated Press show that of the roughly 25,900 flood insurance policies in effect in Delaware as of December 2012, more than 3,600, or 14 percent, are subsidized by the government and facing rate increases.

In an effort to put the debt-laden program on sounder financial footing in 2012, Congress enacted a law aimed at requiring policyholders whose premiums have been subsidized to start paying rates based on the true risk of flooding at their properties.

Congress recently changed that law to cap the increases at 18 percent a year for primary residences and multifamily buildings, while premiums for vacation homes and businesses will increase 25 percent annually.