Mt. Vernon Register-News

March 28, 2014

Flood insurance rates spike

By RICK HAYES rick.hayes@register-news.com
The Register-News

---- — MT. VERNON — Catastrophic national events, along with the federal government’s inability to make the program financially stable, is likely to lead to higher rates for property owners enrolled in the National Flood Insurance Program.

At least 1.1 million policyholders are likely to see insurance premiums rise substantially in the next few years as the government whittles down rate subsidies for people in the riskiest flood zones.

Lawmakers this month tweaked the troubled program for the second time in two years after acknowledging that a previous overhaul in 2012 had socked too many policyholders with rate hikes they couldn’t afford. The legislation, however, has only put off the day of reckoning.

“Look at all the major floods we’ve had in recent years. Not just looking at Katrina and Sandy, but you’ve had these others taking place at various locations. Throughout the nation, you’ve had rivers flood for various reasons, and even our own flood of 2011, a lot of damage took place and homes were destroyed,” said Steve Lueker, Jefferson County Emergency Management Agency coordinator. “I’m sure it’s due to national averages of increased costs.”

Information from the Associated Press is estimating 71 percent of current policies in Jefferson County will increase; and 61 percent in Mt. Vernon.

Jefferson County became involved in the National Flood Insurance program in October 2000, according to Lueker.

“Various municipalities have their own distinctive rights to belong or not belong,” he explained. “Ina has opted to belong to the program. The city of Mt. Vernon was an active member long before the county joined.”

Lueker said the county is a relatively new member of the program.

“We had a lot of construction that took place in the rural areas in flood plain areas prior to that date,” he said. “They therefore, have a lot more properties that are at-risk while the city of Mt. Vernon has controlled things a lot longer.”

Lueker said another issue that will come into play is at what level the properties are in. Properties in low-lying areas and closer to a watershed are classified as Zone A; “very limited” flooding is considered in Zone B; and Zone C has little or no flood risk.

Lueker declined to place a percentage of how much county property is in a flood plain, although he provided a Federal Flood Insurance Rate map which showed the flood plain areas.

According to the information provided, there is $2.5 million of flood insurance in force in Jefferson County and $1.8 million in the city of Mt. Vernon. The total number of policies in Jefferson County facing annual increases of 25 percent or more is six; and the total number of policies facing annual increases of up to 18 percent is 11. In the city of Mt. Vernon, the number of policies facing annual increases of 25 percent or more is five; and the number of policies facing annual increases of up to 18 percent is nine.

The Village of Ina has $105,000 in flood insurance in force. There is only one policy in force, which is not expected to increase, according to A.P. projections.

In Illinois, the number of policies facing annual increases has been placed at 49 percent. There is currently 48,949 policies in force, valued at $44 million.

In a law signed by the President a week ago, FEMA is given 18 months to complete a study on flood insurance affordability and up to 36 months to find a way to offer targeted assistance to policyholders who can’t afford high premiums. It also said FEMA should set a goal of limiting annual premiums to no more than $2,500 per year for $250,000 in coverage.

The flood insurance program is up for re-authorization by Congress in 2017.

Editor’s note: Associated Press contributed information for this story.