City Council this week got a wake up call on the cost of federal flood insurance, something many homeowners in the Coastal Bend are required to have.
Premiums all around the country are going through the roof, and local property owners are about to get socked once again.
A new law adopted by lawmakers last year went into effect Oct. 1, allowing immediate hikes in National Flood Insurance premiums. Those premium increases are to make up for staggering losses suffered by the program that amounted to some $20 billion after Hurricane Sandy, which hit the eastern seaboard a year ago yesterday.
Between hurricanes Sandy, Katrina and Ike, and many other natural disasters, the FEMA-run program has been a boondoggle for lawmakers trying to cut government spending; but those premium increases have already shocked many coastal homeowners.
"We're seeing up to 25-percent increases, and if somebody has a $1,000 or $2,000 or $3,000 policy, that's a significant jump, and they're starting to realize that," said Mark Hanna of the Insurance Council of Texas.
Hanna says many of those with National Flood Insurance coverage have already seen their rates increase an average of five-percent since the beginning of the month. City leaders want lawmakers to slow down the increases.
"We need a stable market. We need to have stability in windstorm and flood insurance," said Tom Tagliabue of Corpus Christi Intergovernmental Relations. "Our vacation market down here and our existing homeowners need to have a stable market and predictable rates, so that they know what they're going to have to pay for their homeowners insurance and their flood insurance. So we need to be engaged in those legislative issues. Have our congressional and senatorial members working on our behalf."
The new law could potentially impact more than 700,000 homeowners in the state of Texas, including those in the Coastal Bend.
The City will vote soon on a resolution directing lobbyists to urge that lawmakers slow down those increases to avoid wholesale rate increases.
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