Never mind actual floods. Floridians say huge jumps in flood insurance bills are trapping them in their homes.
How big? Try 898 percent.
Ask Aaron Greenwood. He purchased a home this year figuring the flood premium was $4,397 a year. He never imagined a nearly 900 percent increase to $43,885.
“I would not have purchased this home if I had been aware of the increased flood insurance premiums,” said Greenwood, 43. “I cannot pay the new premium. I cannot sell this home with a flood insurance rate of over $43,000 a year.”
The married military veteran with two children in Pinellas County provides a striking example from a “friend of the court” brief Florida officials filed this week in a case Mississippi has brought against the Federal Emergency Management Agency.
Florida has more properties than any other state affected by the sharpest immediate increases, with more than 268,000 including more than 4,000 in Palm Beach County.
But the fallout from dramatically higher rates is far more widespread, and it is often not apparent until elevated premiums kick in for a new buyer. Tens of thousands of residents, including many in the county’s western communities, could be required by lenders to buy flood insurance policies for the first time as FEMA updates flood maps. Federal officials granted an extension until Nov. 30 for communities to provide more data and comment.
The states hardest hit by it want to stop big rate increases set in motion by Congress’s 2012 overhaul of the National Flood Insurance Program, which was $25 billion in debt. Conservative groups including Americans for Tax Reform are calling for an end to subsidized rates, but politicians sometimes fond of endorsing such principles are singing a different tune in this case.
Florida’s GOP Gov. Rick Scott said, “We are supporting Mississippi in their lawsuit against FEMA because the NFIP rate hike will not only hurt Florida families but will devastate our real estate market. President Obama should use every tool possible to help Florida families and we urge him to act immediately.”
It’s an awkward situation for Democrats and Republicans alike who supported the 2012 Biggert-Waters law. They say they were trying to save the federal program for the long run but rate hikes like this were not what they had in mind. One of the law’s primary sponsors, U.S. Rep. Maxine Waters, D-Calif., said last month, “FEMA’s poor implementation, inaccurate mapping and incomplete data has led to unreasonable and unimaginable increases in premiums.”
Last week Realtors met in West Palm Beach with lawmakers in support of a bill to delay increases four years while an affordability study is carried out. Big increases are “debilitating to our markets,” said Robert Goldstein, past president of the Realtors Commercial Alliance of Palm Beach County.
Meanwhile, the nasty surprises keep coming for homebuyers like Rebecca Alexander of Dunedin.
She said the flood insurance premium for a $216,000 home she bought last year shot from $1,614 to $8,924.
“When I purchased my home, I had no idea the flood insurance premium would increase so dramatically and so quickly,” Alexander said in the state’s filing. “I would not have even considered purchasing this home with the increased flood insurance premium.”