By Jane Smith
An 18 percent annual increase in your flood-insurance premium is a hefty hike, but it beats the 25 percent that many coastal homeowners were facing.
A new federal law caps increases at 18 percent for primary residences. Owners of second homes and business, though, still could pay 25 percent increases.
The big jumps were intended to make the National Flood Insurance Program solvent after huge payouts from hurricanes Katrina in 2005 and Sandy in 2012 put it $24 billion in debt.
Premiums for everyone would have jumped 25 percent each year until they were high enough to support the program.
The federal flood-insurance program serves 5.6 million homes nationally, with nearly 40 percent in Florida. About four out of five policies pay what the Federal Emergency Management Agency calls full rates, but nearly 5,000 Palm Beach County policies have premiums “inadequate for risk,” according to FEMA.
“I’ve seen some astronomical rate increases” under the previous plan, said Ken Schenck, Ocean Ridge town manager.
The new law caps flood-insurance premiums at 1 percent of a policy’s coverage. For example: a $5,000 yearly premium for $500,000 coverage.
Most of the coastal areas of Highland Beach, Lantana and South Palm Beach are in flood zones.
Condos dominate Highland Beach and South Palm Beach, and residents technically live above flood zones, South Palm Beach Town Manager Rex Taylor explained. But flood insurance is included in their association fees.
Higher premiums for second homes troubles Schenk, since the populations in Ocean Ridge and other coastal communities usually double in season. “We have no idea how many are using Ocean Ridge as their primary residence,” he said. The town has about 1,300 registered voters and a 2013 population estimate of nearly 1,800.
Many of those barrier-island homes are subject to storm surge and are evacuated as hurricanes approach. Sections of A1A often flood during strong storms and some neighborhood streets flood during peak high tide times in the spring and fall.
FEMA creates maps that identify flood risk, and continually revises them, creating some flood zones for new construction and mortgaged property.
Ocean Ridge is appealing proposed changes in the maps, that excluded only 140 properties from the flood zone, since the town spent $10 million to improve drainage in its south end. Schenck hopes to get 50-100 more properties removed from the flood zone.
Richard Radcliffe, executive director of the Palm Beach County League of Cities, said his group also submitted information about why certain areas should be excluded from flood zones.
Delray Beach has appealed some of its coastal properties placed in flood zones, building official Steve Tobias said, but Gulf Stream is waiting before it considers an appeal, according to Town Manager William Thrasher.
Boca Raton will appeal proposed changes to flood maps along its canals, but not its coastal areas, Dan Grippo, municipal services director, said. “It’s a given along the coast that the (homes) are subject to storm surge.”
FEMA is expected to issue new maps by about June, followed by 30 days for public review and another 90 days for community officials and property owners to submit more technical and/or scientific data.
Still, the new maps may not go into effect until August 2015, FEMA said.
For more information on the process, visit fema.gov/national-flood-insurance-program-flood-hazard-mapping/letter-map-change.
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