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Friday, Jun 22, 2018
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Flood insurance rates to increase as hurricane season looms

Forecasters predict an active hurricane season this year, with as many as 20 named storms bringing winds of as much as 100 mph.
Rising floodwaters and insurance costs, though, may pose a bigger problem than hurricane winds for many Tampa Bay area residents.
Floods can be triggered by no more than an afternoon thunderstorm and have caused more damage over the years than other tropical weather hazards, experts say. Especially during hurricane season, which begins Saturday, powerful storms can develop throughout the area on an almost daily basis.
The financial cost of floods has sparked a sweeping reform of the federal government's National Flood Insurance Program, which already has started increasing rates by as much as 25 percent for policyholders who live in high-risk areas.
More than a third of flood insurance policies in Pinellas County and about 20 percent of those in Hillsborough could see major rate hikes in the coming years as the federal program looks to make premiums more accurately reflect risk.
Residents in flood-prone places such as South Tampa, a peninsula that's only 3 miles wide, may start paying significantly more for extra flood insurance, insurance agents say.
“It's going to reach a point where you pay $4,000 for homeowner's insurance and $2,000 for flood insurance,” said Phil Cole, who sells flood policies in Town 'n' Country, South Tampa and Westchase.
Last year, Congress passed major changes to the National Flood Insurance Program meant to eliminate artificially low rates and shore up federal funds that have been eviscerated by large-scale disasters such as hurricanes Katrina and Sandy.
Many policies, particularly in high-risk zones known as Special Flood Hazard Areas, are set to increase by 20 to 25 percent annually over the next few years.
The program has subsidized about 20 percent of all flood policies nationwide on older homes built before accurate flood maps were drawn. Flood maps are typically updated every five years or when new land usage has an impact on drainage.
Most subsidized homes were built prior to the 1980s.
That subsidy already has been removed for new policies on these high-risk properties, and more will be phased out this fall.
Policies on homes that have repeatedly flooded as well as nonresidential properties are set to go up by 25 percent on Oct. 1.
For now, homeowners will be able to maintain their current flood insurance rates on their primary residences, but their subsidies will end when they renew their policies, purchase new ones, sell their homes or if their properties suffer repeated flood losses.
After 2014, existing policies for properties deemed safe from flooding could increase the next time a city or county redraws its flood maps.
A bill introduced last week by Louisiana Sen. Mary Landrieu seeks to delay the implementation of the rate hikes until an affordability study mandated in the legislation is completed.
Her bill would also protect properties that have been grandfathered in at lower rates.
Floridians hold 37 percent of all flood insurance policies nationwide more than 2 million, according to the Federal Emergency Management Agency.
There were 142,757 flood insurance policies in Pinellas County as of April 1 and 69,820 in Hillsborough County, according to FEMA. About 35 percent of Pinellas flood insurance policies and 21 percent in Hillsborough are subsidized.
Most people who buy flood insurance policies do so because their lenders require it, Cole said.
“I hear frequently from a client that 'I only owe $5,000 on a house, and I want to get rid of my $1,500 flood policy,” Cole said.
Flood insurance can range in price from a few hundred to several thousand dollars, depending on a home's location, age and other risk factors.
“A big issue is that rates can vary depending on the height the first floor is above the flood level, which means some homes might have a $300 policy and another nearby might be $1,500,” Cole said.
The federal government began providing flood insurance in the late-1960s because most private insurers would not offer it, but it is sold by private insurance agents.
Homeowners in lower-risk places aren't required to buy flood coverage, which is not included in homeowner's insurance.
Cole has been writing flood protection since the federal program started. His customers are alarmed by the increasing rates.
“People see the rates going up, and they are afraid of what will happen,” Cole said.
Residents in waterfront communities, such as Shore Acres in St. Petersburg, could face a big dilemma if their premiums start increasing drastically.
Streets here flood during prolonged afternoon thunderstorms, and many homes have flooded during tropical storms in recent years. Many residents wouldn't be able to afford a major hike in flood insurance rates, former neighborhood association president Patti Cook said.
“Even though the economy, I feel, is coming back somewhat, people just can't afford to pay that,” she said.
“So I would think you'd see a lot more for-sale signs in Shore Acres.”
While it's been decades since the Tampa Bay area has taken a direct hit by a major hurricane, slow-moving, drenching storms, such as Tropical Storm Debby last summer, illustrate the risks flooding poses.
It wasn't only waterfront towns such as Pass-a-Grille that were submerged by storm surge; even inland areas found themselves under a foot of rain water.
“That produces the most damage and kills the majority of people, not the wind; it's the water,” said Dennis Feltgen, a spokesman for the National Hurricane Center in Miami.
Although homeowners outside flood-prone areas may not be required by their lenders to buy flood insurance, they run a great risk by not doing so, said Tom Iovino, a spokesman for the Pinellas County Emergency Management department.
Flood waters can quickly turn streets into rivers, inundate homes, destroy personal belongings and displace families.
Finding out its homeowner's policy wouldn't cover a family's losses would be devastating, Iovino said.
“Not only have they lost everything, but now they're not going to get reimbursed,” he said.

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The Associated Press contributed to this report.

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