Sticker shock for homeowners getting flood insurance notices - FOX 13 News

Sticker shock for homeowners getting flood insurance notices

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ST. PETE BEACH (FOX 13) -

A U.S. Senate committee will hear testimony later this week about the impacts of reforming the National Flood Insurance Program. It may provide the first indication of Congressional interest in avoiding a crisis now sweeping over coastal communities.

USF-St. Petersburg associate professor of political science Judithanne Scourfield-McLauchlan is optimistic.

"There is movement afoot and I think that's why Senator (Bill) Nelson and...others are really trying to push hard to get action fast," McLauchlan said, before acknowledging there will be a fight.

"Those people who were proponents of the legislation very strongly when it passed are still going to want to move forward, saying we know this is going to hurt, but if we're going to have a flood insurance program, we need to have these changes" she explained.

In July 2012, Congress extended the National Flood Insurance Program for five years. Since 1974, the NFIP has required billions of dollars in federal subsidies.

Opponents of the program demanded premiums that are based on risk, effective October 1, 2013.

No one at the time had any idea what risk-based rates would look like. Now they do.

"$8,859, renewed October 1st," St. Pete Beach homeowner Penny Lee told FOX 13 News Sunday.

Coincidentally, she closed on her house October 1, 2012. She bought flood insurance at a subsidized rate of $1,339. Last week, she received her shocking renewal notice.

"No one mentioned anything about flood insurance increasing," Lee said. "How do you come up with that kind of money when you're trying to make ends meet as it is?"

In Pinellas County alone, there are an estimated 30,000 single family homes with subsidized flood insurance. Just within the past few weeks, people started taking notice of the insurance reforms.

"Now members of Congress and members of the Senate are hearing from their constituents, are hearing from local community leaders, municipal governments, state governments, that something has to be done," McLauchlan said.

It is not clear how Congress can stop the process now. The NFIP extension approved July 20, 2012 took more than a year to implement. Also, the relief Congress is now considering only addresses annual increases imposed on existing homeowners who wish to stay in their houses.

Left out are new policies required by buyers of houses with subsidized flood insurance, and owners of second homes and commercial properties.

"I don't know at the end what's going to happen, but my picture is not rosy," said Dr. Maling Ebrahimpour, Dean of USF-St. Petersburg's College of Business. "My main concern...is not actually how much people pay, but how much disposable income they have to give up, which means in the end, it really impacts the economy as a whole."

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