Make us your home page
Instagram

Senate panel examines flood insurance rate increases

A rush to stave off huge flood insurance rate hikes comes to a head at a Senate hearing in Washington, D.C., today.

Testimony is expected to focus on "unintended consequences" of the Biggert-Waters Flood Insurance Reform Act, a 2012 law enacted to keep the National Flood Insurance Program solvent by phasing out lower, subsidized rates for older properties in flood zones.

But with just two weeks before the harsher provisions in Biggert-Waters take effect, time is running out, especially for home­owners like Penny Lee.

Lee bought a house in St. Pete Beach in September 2012. She had never heard of Biggert-Waters. Neither her real estate agent nor mortgage company told her that recent buyers of homes subsidized with lower flood insurance rates would immediately lose their subsidy when they renew their policies after Oct. 1.

She found out what it meant when she talked to her insurance agent a week ago, on her birthday: Her flood insurance premium ballooned from $1,339 to $8,859.

"That was my birthday present," Lee said. "I'm hit just because I happened to buy a house last year. … This is more than my house payment. It just blows your mind."

Her home — like many affected by the spike in flood rates — is modest: a two-bedroom, cinder-block, one-story cottage that's not on the water.

Lee moved from Atlanta to St. Petersburg with visions of retiring here. She made a big down payment, buying a $200,000 home thinking that would keep her monthly mortgage manageable.

The flood insurance crisis blew "manageable" out the window. If her bank pays the higher flood premium next month — and recoups the funds from her over the next 12 months — her monthly house payment would jump from $977 to more than $1,700. That's after she raised her deductible and cut as much of her content coverage as possible to whittle her flood payment down to $7,149.

Lee feels luckier than many. She has some savings, and she knows other homeowners are facing even sharper rate hikes.

Following recent media coverage, several politicians representing Central Florida have taken up the cause. U.S. Reps. Kathy Castor, C.W. "Bill" Young, Gus Bilirakis and Rich Nugent, along with Sen. Bill Nelson, are among those urging at least a delay in implementing some of the rate increases.

Penny Lee stands in front of her modest St. Pete Beach home on Tuesday. Lee bought her home in 2012, the year Congress passed a law that will raise her flood insurance from $1,339 to $8,859.

CHRIS ZUPPA | Times

Penny Lee stands in front of her modest St. Pete Beach home on Tuesday. Lee bought her home in 2012, the year Congress passed a law that will raise her flood insurance from $1,339 to $8,859.

Rate hike deluge

Barring any congressional action, here are parts of the Biggert-Waters Flood Insurance Reform Act going into effect Oct. 1:

• Owners of homes in flood zones that were subsidized with lower rates could face an annual rate increase of 16 to 17 percent, plus a 5 percent fee going toward a new flood insurance reserve fund.

• Anyone who bought a subsidized home after July 6, 2012, loses the subsidy upon the next renewal.

• Owners of businesses with subsidized policies and those property owners with severe repetitive losses will see rates rising 25 percent a year until their premiums reflect true market risk.

Senate panel examines flood insurance rate increases 09/17/13 [Last modified: Tuesday, September 17, 2013 10:23pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  2. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.

  3. Grocery chain Aldi hosting hiring event in Brandon Aug. 24

    Retail

    BRANDON — German grocery chain Aldi is holding a hiring event for its Brandon store Aug. 24. It is looking to fill store associate, shift manager and manager trainee positions.

  4. Lightning owner Jeff Vinik backs film company pursuing global blockbusters

    Corporate

    TAMPA — Jeff Vinik's latest investment might be coming to a theater near you.

    Jeff Vinik, Tampa Bay Lightning owner, invested in a new movie company looking to appeal to a global audience. | [Times file photo]
  5. Trigaux: Look to new Inc. 5000 rankings for Tampa Bay's future heavyweights

    Business

    There's a whole lotta fast-growing private companies here in Tampa Bay. Odds are good you have not heard of most of them.

    Yet.

    Kyle Taylor, CEO and founder of The Penny Hoarder, fills a glass for his employees this past Wednesday as the young St. Petersburg personal advice business celebrates its landing at No. 25 on the 2017 Inc. 5000 list of the fastest growing private companies in the country. Taylor, still in his 20s, wins kudos from executive editor Alexis Grant for keeping the firm's culture innovative. The business ranked No. 32 last year. [DIRK SHADD   |   Times]