Huge, expensive changes coming in flood insurance

by Mary Alys Cherry


With thousands of property owners facing crippling hikes in flood insurance, Bay Area Houston cities have joined a national effort to delay implementation of the Biggert-Waters Flood Insurance Act passed by Congress in 2012.

The legislation, passed on a 402-18 vote, would extend the National Flood Insurance Program for another five years but includes a number of provisions that could prove extremely costly for area home and business owners.

It makes big changes to the NFIP of which everyone should be aware:

  • Properties that are below the base flood elevation level, which has been raised by five feet with the revised act, will face significantly increased rates. Congress has instructed FEMA to stop giving premium discounts to properties that are below the BFE, even if they were up to code when built.
  • Grandfathered rates are to be phased out. Biggett-Waters phases out subsidies for businesses, vacation homes and structures that flood repeatedly that already existed when the original program began.
  • And, it’s not just expensive waterfront homes that will see the increase. Property all over the area in low lying areas and flood zones face huge hikes. Rates for certain homes in high-risk areas will increase 25 percent each year over the next four years, starting this year. It has been estimated that homes with repetitive losses could start at $10,600 per year. Increases that will affect coastal areas negatively.

Former Nassau Bay Mayor Don Matter, now retired, formerly paid $500 for flood insurance on his home. This year, his premium is expected to be $3,600 and it will go up 25 percent each year. Current Mayor Mark Denman is expecting his annual premium to increase from about $700 to $4,346.

The local fight to delay or stop the proposed changes is being led by the Bay Area Houston Economic Partnership, which was first contacted in early August by the mayors of La Porte and Nassau Bay, asking for a regional meeting to discuss the impact of the changes. BAHEP hosted the meeting Aug. 6 with 51 attending – representatives from 12 area cities, Rep. Randy Weber, State Sen. Larry Taylor, Harris County Commissioner Jack Morman, Houston City Councilman Dave Martin and representatives  of other elected officials.

A FEMA page was set up on the BAHEP website, discussing the impact of the changes and 20 area cities and the Harris County Commissioners Court have passed resolutions urging a second look at the legislation and possible changes. Houston Mayor Annise Parker has written letters to area congressmen, asking their help.

They have joined with officials across the country – New Orleans, Hurricane Sandy victims in New York, rivertown communities on flood plains in the Midwest, the Gulf Coast, etc. – working with Congress trying to find a solution.

It’s a very serious problem, BAHEP President Bob Mitchell says.

“Many properties that were in the 500-year flood plain are now in the 100-year flood plain, which dramatically affects their flood insurance rates. Biggert-Waters will not only affect the Bay Area Houston region but also any region in the country with homes and businesses in a flood plain – coastal areas as well as property along rivers and around lakes.”

Nassau Bay is very appreciative of BAHEP’s effort, City Manager Chris Reed says.

“We couldn’t have done this without BAHEP’s help. We’re a small city fighting a big battle, and there was no way that we could have arranged a meeting with the people who were in that room by ourselves.”

What will be the outcome if Congress doesn’t act?

  • Homes in the flood plain will become difficult to sell
  • There will be a likely decrease in housing values
  • Plus a likely increase in housing vacancy rates
  • Homeowners with no mortgage will likely drop flood insurance
  • The property tax base will decrease as the result of lower property values
  • A likely increase in rental property
  • A likely decrease in economic development
  • A deterioration of a city’s infrastructure due to a decrease in funds available for maintenance and operations
  • A likely decrease in city services
  • A likely increase in slum and blight

One Comment to “Huge, expensive changes coming in flood insurance”

  1. Louise Warner says:

    We live on a river in a house over 200 yrs. old. It has not flooded during the existence of the Federal Flood Insurance Program, yet is in a 100 yr. flood plain. We pay almost $3000.00 per year in flood insurance. If we sell our house the premium would go up considerably for a new owner, or even if we rented the house, the premium would rise considerably. In effect, we are imprisoned in this house until we die, as the new premium would be unaffordable, rendering the house unsellable. We are old people with health problems that make it impractical to continue living in a large two story home that is not handicapped accessible. The government has pulled the rug out from under us and I consider this a “taking of property” by government action, yet there is no recourse for the property owner. Our taxes have not gone down, we can’t sell, and we can’t afford the new premium increases and there is no buyout program. We are going to drop coverage, because we can no longer afford it, but anyone buying and taking a mortgage loan will be REQUIRED to carry flood insurance.
    This is yet another nightmare inflicted on us by the morons in Congress. Throw the bums out!

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