Mar 24, 2014
09:10 AMConnecticut Today
$60,000 a Year for Flood Insurance? Connecticut Shoreline Residents Avoid 'Surge'
AP Photo/U.S. Coast Guard, Petty Officer 2nd Class Rob Simpson, File
This Oct. 30, 2012 aerial photo provided by the U.S. Coast Guard shows storm damage from Superstorm Sandy in a portion of New Haven, Conn. In 2012, Congress passed a law requiring approximately 1.1 million policyholders nationwide to start paying rates based on the true risk of flooding. Nearly 4,200 policyholders in Connecticut face increases of up to 25 percent each year. More than 14,000 property owners in the state will be hit with annual premium increases as high as 18 percent annually, until the policyholder switches to a risk-based rate.
Nearly 1,100 homes in Milford and hundreds more in other Connecticut shoreline communities will be subject to increases of at least 18 percent a year in flood insurance rates, according to a law signed Friday by President Barack Obama.
However, the bill staves off increases that could have been in the tens of thousands of dollars.
Towns on the shoreline have the largest number of affected residences, with 716 in East Haven, 674 in Old Saybrook, 648 in Branford and 614 in West Haven, according to data compiled by the Associated Press.
The new law amends 2012 legislation intended to eliminate subsidies by the Federal Emergency Management Agency.
State Sen. Leonard Fasano, R-North Haven, said one of the effects of the new bill is to grandfather in the old rate when a home is sold. Fasano said he knows of someone selling his house who pays $2,500 in flood insurance. A buyer “would have to pay $60,000” without the revisions. “I’ve heard 60, I’ve heard 40, I’ve heard 30,” Fasano said. “It was significant; that’s why it’s really stifled the real estate market.”
While yearly increases will now go up a maximum of 18 percent, they’ll still rise over time to a rate high enough to eliminate the FEMA subsidy, Fasano said.
“The good part about it is, you can avoid that by flood-proofing your house” or raising it, said Fasano, who owns residential properties on the East Haven shoreline.
“It’s not a perfect bill for those along the shore but it’s a lot better than what was on the table,” he said.
Diane Ifkovic, an environmental analyst with the state Department of Energy and Environmental Protection, is also the state’s National Flood Insurance Program coordinator. She said that in addition to grandfathering in rates when a home is sold, those whose properties were placed in a new zone because of “remapping” won’t be charged the higher rate immediately. Many of these were older colonials that “were given a break on purpose,” Ifkovic said.