New surcharge catches flood insurance policy holders off guard

New surcharge catches flood insurance policy holders off guard

NEW ORLEANS, LA (WVUE) - From bayou communities to those inland, flood insurance rates have increased for a lot of local property owners, and there is a new fee for all those insured against flood-related damage.

The higher rates took effect in April.

"Homeowners are seeing about a 10 percent increase, it could be as high as 18 percent," said Ricky LeBoeuf with Leithman-LeBoeuf Insurance, Inc. in Gretna.

Resident and businessman Robert Wolfe said the policy for his home increased slightly, but it was what happened to the rates for his rental properties that really stood out.

"On some of my other personal investment property, the residences, we did have an increase that was substantial," Wolfe said.

And now on top of the higher premiums, there is also a new surcharge related to flood insurance that took effect in early spring.

"A lot of people are shocked about the surcharge if they overlook it in the mail," LeBoeuf said.

LeBoeuf has been in the insurance business for decades. He has heard from people who are confused about the notices from FEMA regarding the new surcharge and what they will be assessed as part of their flood insurance.

The surcharge is $25 for policies for primary residences and $250 for policies on non-primary residential properties, like rental properties, as well as businesses.

"They just need to make sure they return the proof of primary residence to the insurance company, so that they get the $25 fee instead of the $250 fee," LeBoeuf said.

The letters state that policy holders must verify whether they live in the residence that is insured for most of the year and they have 30 days to submit the verification, along with proof of their address, including a driver's license, to FEMA. Not doing so comes with financial consequences for home owners.

"Once they issue your renewal policy they will issue it with the $250 fee, but you can go back and have them retroactively go back to the $25 fee as long as you can provide the proof in a reasonable time," LeBoeuf said.

"In some cases, that's a pretty substantial percentage increase in your insurance premium," Wolfe said.

Wolfe is also in the construction business and he knows the high premiums in flood-prone areas are driving many people to embrace the idea of raising their homes.

"We're still getting calls. I just had a home owner leave from here that had a home in Marrero that was talking to us about raising their home," he said.

The federal government said the changes in rates and the new surcharge for all flood insurance policy holders are needed to help the financially strapped National Flood Insurance Program.

LeBoeuf said there is more information on the issue at

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