NEW PORT RICHEY — Some west Pasco County homeowners face rising flood insurance rates for waterfront homes after changes in the federal program Oct. 1.
“The price quotes are ridiculous,” said Bob Memoli, a broker for Florida Luxury Realty. Quotes on flood insurance for some Gulf Harbors homes are starting at $15,000, and the current annual tab might be around $3,000, Memoli said.
“You’re not going to be able to afford it,” Memoli said of flood insurance. Some residents “are barely making ends meet now.”
“I can’t imagine anyone paying those rates,” said Jeff Starkey, a GreatFlorida Insurance Agency agent in New Port Richey. Some owners could face flood insurance going up to $7,000 a year or higher — much higher, in some instances, like $20,000 to $30,000 a year.
Local officials worry a huge jump in flood insurance rates could blunt the budding economic recovery in the real estate market. Memoli said potential buyers of waterfront property are in a holding pattern.
U.S. Rep. Gus Bilirakis, R-Palm Harbor, wants the National Flood Insurance Program to maintain current rates through 2014.
Eventually, though, the federal government must make the flood insurance program solvent again so it will have the money to pay claims after disasters, Bilirakis said. The flood insurance program is running a $20 billion deficit.
Congress created the National Flood Insurance Program in 1968 after private insurers began refusing to cover flood damage because claims were becoming increasingly costly.
The flood insurance rate increase in Pasco will not be limited to coastal areas west of U.S. 19, Memoli and Starkey said. Houses along rivers and lakes or in other flood-prone areas also are likely to become much more costly to insure against flood damage, they said.
Several areas along Seven Springs Boulevard near the Anclote River could be affected by the rate increase, Memoli said.
The new rates could apply to older houses along Grand Boulevard near the Pithlachascotee River, Starkey said. The changes could mean a house built in or before 1981 might not meet current standards for flood elevations.
Outside flood-prone areas, flood insurance could remain relatively inexpensive, Starkey said. A homeowner who has paid off a mortgage could choose not to buy flood insurance. Mortgage lenders, however, require the flood coverage on houses in flood-danger areas.
Congress passed the Biggert-Waters Flood Insurance Reform Act in 2012, ordering the Federal Emergency Management Agency to close the $20 billion deficit in the flood insurance program created by large-scale disasters such as hurricanes Katrina and Sandy.
“Residents in the Tampa Bay area are facing significant rate increases, and I empathize with many of our local homeowners,” Bilirakis wrote in a recent reply to inquiries.
A string of disasters across the United States in recent years has left the National Flood Insurance Program heavily indebted, Bilirakis said.
“I am committed to finding a workable way to balance the need for a sustainable flood insurance program with the economic realities that Floridians currently face,” Bilirakis said.
“We should extend current rates through 2014 to minimize the effects skyrocketing rates would have on homeowners,” Bilirakis said. “However, over the long-term, the best way to protect homeowners financially and physically is to improve flood control infrastructure in our communities.”