Flood insurance rate hikes hit homeowners' wallets

Charges for federal insurance premiums going up by 20 percent

JACKSONVILLE, Fla. – Homeowners with flood insurance will be getting a bigger bill, starting April 1.

New federal insurance premiums are going into effect, raising charges by 20 percent.

Rates are on the rise because the federal fund for flood insurance is facing massive amounts of debt.

Homeowners with flood insurance can expect to see a surcharge on their next bill, because lawmakers voted to boost revenues after partially rolling back a series of rate hikes approved three years ago.

VIDEO: A continuous issue with rising waters and flooding in McCoys Creek.

Homeowners in McCoys Creek (pictured) are required to have flood insurance, because the area is so susceptible to floods. Their next bill -- just like all other homeowners across the country -- will have an extra line: a surcharge of up to $250.

Nancy Jenkins lives near McCoys Creek and said she just learned about the rate increase Wednesday.

"That's insane. We are already struggling in today's economy," Jenkins said. "I'm a single mom, and I can't afford any additional increase."

The surcharge was devised by Congress to boost revenues after the National Flood Insurance Program, which writes almost all the nation's flood policies, lost millions of dollars after a series of major floods.

Homeowners looking to renew their policy or searching for a new one are going to pay more to protect their homes.

Homeowners looking to renew are being charged an additional $25 for flood insurance, if they live in the house. But if it's a secondary home or a rental property, that surcharge is $250.

Insurance agent Matt Carlucci said most people won't notice the increase until their next mortgage cycle.

"I think a lot of people will be surprised," he said. "We will get a lot of phone calls because it's effective today. I think the phone calls will start rolling in the middle of May."

Carlucci said the rate hike could force some homeowners to opt out of their flood insurance coverage altogether. And the 20 percent rate hike could only be the beginning of more increases.

"I think you'll see every type of property insurance rate in Florida go up over the years, because of the severity of storms and the weather patterns are changing and are different," Carlucci said.

There's a push in the Legislature to allow private insurers into the flood insurance market. House and Senate sponsors believe if they can open up the market for competition, that would ultimately drive costs down. 


About the Author:

Tarik anchors the 4, 5:30 and 6:30 p.m. weekday newscasts and reports with the I-TEAM.