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.