Flood insurance rate increase notices in the mail

Flood insurance rate increase notices in the mail

NEW ORLEANS, LA (WVUE) - The cost of insuring your home against flooding is about to go up, and the New Orleans area will be especially hard hit.

The increases aren't as dramatic as first envisioned two years ago when Congress took steps to soften the blow of flood insurance rate hikes, but they will be significant. The national Flood Insurance Program is now sending out notices.

"We received one last week," said Jill Krieger, who lives in Mandeville.

As of April 1, the cost of insuring your home or business against floods goes up.

"I think it stinks. I've got to pay it and pay the $250 increase for this office building where I run my agency. Everyone's got to do it," said insurance agent Clark Gristina.

The new $250 flood insurance fee applies to any building you own, but don't occupy, like a condo or a business. If you live in the home, the fee will be $25, all thanks to a compromise reached by Congress last year to soften the blow of the Biggert Watters Act, which had some homeowners facing increases seven times higher .

"The rate increases were stifled, but they weren't stopped," said Gristina.

The surcharges will be applied every year until the flood insurance program pays for itself.

"We're gonna see these rates phased in over years based on compromises which are less than what we faced in 2012, but more than we had before that," said Gristina.

Aside from flat fees of between $25 and $250, all property owners will also pay a percentage increase with the higher rates being paid by owners of properties in the worst flood zones who don't actually live there.

"It looks like most of the categories are averaging between 11 percent to 24 percent, but most around 14 percent," said Gristina.

But in some cases, the fee increase will be offset.

"If you're in Flood Zone C and elect for flood insurance, those polices will decrease by 2 percent but increase by 20 percent due to the $25 fee," said Gristina.

For Krieger, who owns multiple properties, the increases could be dramatic.

"We're not sure yet, but it may be something we have to work around - maybe sacrifice other things," she said.

The first thing many homeowners will be asked to provide is proof that they actually live in their property. It's an important step that could mean the difference between a $25 surcharge, if you live in the property, or $250.

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