FEMA insurance rates not as high as projected, but still unaffordable

Congressional action could delay implementation for a year

After months of waiting and anxious anticipation, FEMA and the National Flood Insurance Program have finally released newly proposed flood insurance rates that are set to go into effect under the Biggert-Waters Act beginning Oct. 1.

In late March, FEMA warned some residents that they may be expected to pay up to $30,000 per year for flood insurance due to new provisions governing rates passed in the Biggert-Waters Act in 2012. However, FEMA refused to release the data they based those predictions on to either the media or parish official until it could be finalized.

FEMA initially said the final rates would be available by mid-June, but then pushed back the date two more times before settling on mid-August. Without any explanation for the delay, the flood insurance rates were finally released last week.

The final numbers are less than those presented in March and the most owners of property built below base flood elevation (BFE) can expect to pay is around $15,000 instead of the nearly $30,000 first quoted.

Despite the decrease, Parish President V.J. St. Pierre said the anticipated flood insurance rates are still out of reach for most property owners.

“While we are grateful that FEMA has finally released concrete rate information so that our residents can use that information to plan, it is abundantly clear that these rates remain unaffordable for those who followed all the rules and codes when they built their homes,” he said.

Although the flood insurance rates are expected to have a negative effect on parish property owners, for most the increased costs will be delayed until a new flood map is accepted in the parish.

Those who built their homes after St. Charles Parish began participating in the National Flood Insurance Program (NFIP) in 1983 will not be subject to the new rates until either a new flood map is accepted in the area that places their home below base flood elevation or the property is transferred to a new owner.

While a new flood map has been proposed in St. Charles Parish that would subject numerous areas to reevaluation – most notably in the Sunset Drainage District where some homes are expected to be as much as eight feet below BFE – the plans to enact that map are currently on hold. The parish government has vowed to dispute FEMA’s findings when they are officially introduced.

If the maps were to be accepted as is, the West Bank would bear the brunt of the increased rates. The maps would put the 7,595 properties on that side of the river at an average of one-foot below BFE, which would be a cost of just over $2,000 for property owners who currently pay around $400.

Combined that would be an increase of more than $12 million per year in insurance payments in that area alone.

The 910 property owners living in the Bayou Gauche area would be impacted the most. The homes would be an average of four feet below base flood elevation and would cost homeowners an average of $7,300 a year. Other areas more negatively impacted would include the Mimosa Park and Willowdale/Willowridge subdivisions.

In the meantime, some property owners are expected to see immediate increases in property insurance after the Biggert-Waters Act goes into effect on Oct. 1.

Julia Fisher-Perrier, District 7 councilwoman and insurance agent for Riverlands Insurance, said she has been going over the insurance rates and some property owners are at immediate risk.

“There will be some. The people who have been grandfathered in and are not to the elevation requirement will be affected,” she said.

Earl Matherne, St. Charles Parish’s coastal zone manager, said the main issue is with those who own homes built before flood maps were in place.

“For structures built before 1983, then there may some issues,” he said.

Upon renewal of the their flood insurance following Oct. 1, those property owners may be required to get an elevation certificate to show how their property fits into the current flood map and may be subject to the increased rates if their home is found to be below the BFE for their area.

Those at immediate risk also include non-primary homes that owners may be renting out as secondary homes. The new flood insurance rates under the Biggert-Waters Act will immediately be applied to those structures.

In addition, those who have commercial flood insurance policies are expected to be subjected to increased costs sooner than residential property owners.

“Where I would get nervous is with the businesses,” Matherne said. “We don’t know which ones will be affected.”

Matherne is urging businesses to contact their insurance agents to prepare for new flood insurance rates.

“If you can get ahead of it and talk to your agent, now is the time,” he said.

Now that the parish knows how much residents will be expected to pay under the Biggert-Waters Act, they will be able to show elected officials the negative affects the rates will have.

“We are appreciative that FEMA got those numbers out because we can now go to Congress and show them these are going to be the effects, not what we expect is going to happen to our residents,” he said.

Fisher-Perrier said she is hopeful now that Congress will expedite bills that are aimed at delaying the implementation of the Biggert-Waters Act by a year so the act can be examined and potentially changed or repealed altogether.

“If that passes before Oct. 1 then everything will be on hold,” she said. “I feel pretty confident that is going to pass. If it does pass then we are OK at least for another year.”

Matherne said the issue in front of Congress is of extreme importance.

“Now what they need to deduce is, if they are going to leave it like this, if the U.S. real estate market can bear this or is it going to have the effect we think it is going to have and be devastating,” he said.


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