New NFIP flood insurance rates could mean sticker shock for some

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SOUTH MISSISSIPPI (WLOX) – If you’re in the market for flood insurance, be prepared for some sticker shock.

On Oct. 1, FEMA instituted their new Flood Risk Rating 2.0.

FEMA’s website says that for South Mississippi, the majority of homes will see a rate increase between zero and $10 a month, but for about 1,700 homes and businesses, the increase will be much higher.

“We have seen a couple that didn’t change very much, a couple that went down a few dollars, but the majority of them have been going up,” said Angelyn Treutel Zeringue of Southgroup Insurance. “We’ve seen some extreme differences in the preferred zones. The A zones were seeing rates in the $2,000-$3,000 area, and the V zone much higher, even $4,000 or so.”

Zeringue said they have seen odd fluctuations in the new rates. A house in Kiln, for example, saw the rate go from $570 to around $1,800 a year, but a similar house in Vancleave only went up to $600 or $700.

The cost of flood insurance through the National Flood Insurance Program, or NFIP, will be based on the new metrics that FEMA is using to determine your risk. How close you are to water is one of the biggest changes.

“It’s proximity to any flooding source. So it could be near a levee, near a river, near the coast, anything along those lines that could cause a flood is going to end up with those higher rates,” Zeringue said.

The new rates now only affect new policies written through NFIP. Existing policies won’t see an increase until next April or later, so it is important to keep your policy up to date.

“The one thing I would tell anybody who has a flood policy is to make sure you don’t let it lapse” she said. “If you let your policy lapse, it will go up overnight to the new level” when you do renew it.

“If you retain an existing policy, it will go up a little each year, but you won’t have the drastic change,” she said. “There are changes of about 18-25% a year depending on what flood area you are in.”

There are things you can do to reduce your flood risk that will also lower your premiums.

“Raising the home, raising equipment and machinery, installing flood vents,” were among the things Zeringue mentioned. “any kind of floodproofing will get you a credit on your flood insurance.”

The net effect on home and business owners in South Mississippi will not be known for years, but many fear the higher prices could mean fewer insured properties.

“I actually think this will keep people from retaining their flood insurance,” Zeringue said. “But again, the good news is the private market is stepping in and there will be options through the private market that could in the long run end up being more affordable.”

FEMA has interactive maps on its website that provide general information on the new policies, but you should ask your agent to see what the increase would be at your house.

There are about 34,000 structures in South Mississippi that are insured by the NFIP. The program is deep in debt. The new rates are intended to shore up the federal program, but some worry that they won’t be able to afford the protection.

“FEMA needed to do something because they are $20-$30 billion in the hole right now. So obviously their model’s not working, and they had to do something,” Zeringue said. “But this is so extreme that it’s going to have a huge ripple effect on the Coast.”

Copyright 2021 WLOX. All rights reserved.



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