Skyrocketing flood insurance causing grief for some area residents

Area officials and residents got a chance recently to tell state representatives how skyrocketing flood insurance costs are putting them in a real bind.

Sen. Richard Blumenthal (D-Conn.) and Congresswoman Rosa DeLauro (D, CT-3rd) visited Stratford Feb. 7, along with area homeowners who have been hit with large flood insurance cost increases, to call on the U.S. House of Representatives to pass legislation that would at least delay the imposition of the new insurance rates.

Mayor Benjamin Blake of Milford, a Democrat, told the gathered officials that one Milfod resident was notified that his new flood insurance premium would be $63,000 on a policy with $250,000 of coverage. Blake said “almost half of homeowners with a mortgage in a flood zone are getting increases of 25% or more,” and the flood insurance issue affects 18,000 people in Connecticut, at least.

Flood insurance is managed by the Federal Emergency Management Agency, and it is required by banks when there is a mortgage on a property in a flood zone, as designated by FEMA.

Kate Higgins and Bill Leece of Branford told the audience that they had been paying $2,800 a year for flood insurance. When they put their home on the market this past year, they found a buyer in four weeks, but the buyer backed out of the deal after discovering that new flood insurance for the property was estimated at $40,000 to $50,000 a year.

Higgins and Leece lowered the price 15% to compensate, and they later received an offer 35% below the asking price. They pointed out how this flood insurance situation negatively affects the tax base and real estate prices.

Jody Rowell of the Morris Cove area in New Haven introduced herself to the group as a single mother who had been making about $55,000 a year, but is now out of work and struggling. Her home is valued under $180,000, she said. The premium on her flood insurance policy increased from $1,600 to $4,800 per year. She said she does not have the money and will have to ask her 82-year-old mother to help.

Stratford Realtor Deborah Loban of William Raveis Real Estate, which hosted the meeting of homeowners and politicians at their Main Street, Stratford office, said she sold a home on Sand’s Place in Stratford a year ago and no flood insurance was required. The new flood zone maps from FEMA include that home in a flood zone, and the flood insurance costs $1,428. Loban said she knows of two homes that are much closer to the shore, but do not require flood insurance because they are more elevated.

Deb Chamberlain of Connecticut Realtors, which co-sponsored the meeting, told a story of a buyer who came to the closing table and was surprised to learn that $7,000 to $8,000 would be required for flood insurance. The deal fell through.

These are just a few examples of people who are facing real financial hardship from the large cost increases in flood insurance. DeLauro said there are “tens of thousands of homeowners dealing with this issue of 100% and 500% increases in flood insurance premiums and paying over $10,000 or more, or as much as 5000% higher.”

“I am calling on the House to pass the Homeowners Flood Insurance Affordability Act” that passed in the Senate by a bi-partisan majority vote of 67 to 32 on Jan. 30, DeLauro said. The bill requires FEMA to complete an affordability study and propose solutions to address the flood insurance cost issues before premiums can be raised. It would delay the rate increases that took effect following passage of the Biggert-Waters Flood Insurance Reform Act of 2012, which sought to reform the nation’s nearly bankrupt flood insurance program after hurricanes Katrina and Sandy.

“FEMA has had poor implementation and incomplete data in coming up with new mapping and flood insurance rates,” DeLauro said. “They need to solve those issues before imposing increases.”

The congresswoman said there were 182 House members favoring passage, leaving 36 more votes for the 218 needed to pass the measure.

“We can get it done,” DeLauro said. “We need to get it done. We need the Speaker of the House to get it to the floor. People today are out of work and don’t have the wherewithal. This is not only a Connecticut issue, but it’s an issue across the country.”

“We’re going to keep up the drumbeat every day,” in the House of Representatives. “We can’t sit around while homeowners are soaking up unreasonable hikes. This is a bi-partisan issue,” DeLauro exclaimed.

She said that people in Washington think that the majority of people impacted are owners of $5 million homes on the water, but, in reality, the majority of people affected are not wealthy.

Blumenthal also called on the House of Representatives to pass the insurance affordability act. He said the flood insurance rate increases are “a tragedy for individuals who are being wiped out of homes financially, just as floods wiped them out. They are just plain dumb,” said the senator. “They are based on unaffordable rates and inaccurate flood mapping.”