Homeowners worry about flood insurance rates [Charleston Daily Mail, W.Va.]

Oct. 24--CHARLESTON, W.Va. -- When Richard Holmes purchased his St. Albans home two months ago, he didn't expect his monthly payments to double.

Now, because of increasing flood insurance premiums under the 2012 Biggert-Waters Flood Insurance Reform Act, Holmes said he and his family might lose their Riverbend subdivision home before they get the chance to enjoy it.

Homeowners nationwide are experiencing similar problems.

The act, which was attached to the federal transportation bill, was meant to shore up the National Flood Insurance Program because of multiple claims from Hurricane Katrina.

The increase is supposed to reflect the full risk for covering properties. Currently, many flood insurance policies are subsidized, particularly residential policies. In West Virginia, 60 percent of policies are subsidized.

Most people can keep their primary residence's subsidized rate unless they sell their property, let the policy lapse, buy a new policy or their property sustains flood damage.

Starting Jan. 1, people who own a second home in a Special Flood Hazard Area also will see increases amounting to 25 percent annually until the rate reflects true risks.

Beginning this month, properties with subsidized rates that have experienced severe or repeated flooding and owners of businesses or non-residential properties in a Special Flood Hazard Zone will see a 25 percent annual increase until rates reflect true risk.

Chuck Grishaber, Kanawha County's floodplain manager, said he has received many calls from residents like Holmes. He said although the act went into effect last year, problems have started up more recently.

Holmes, who works as a coal miner in Danville, said he knew his home was in a flood zone when he bought it. However, he said he was told at closing the cost of flood insurance would be $1,470 a year.

That number later went up to $12,000 a year.

Holmes bought the house for $160,000 and his monthly payment doubled.

"I can't afford that. I'm going to have to foreclose," Holmes said. "It's going to ruin my credit; so I probably won't be able to buy another home. And renting, they check your credit. So, I don't know what's going to happen there."

He isn't alone.

Just in his neighborhood, several residents expressed concerns over the increasing costs, though none had experienced an increase quite as dramatic as his.

One of his neighbors said his insurance increased from $1,400 to $1,900 a year and one of the solutions to reduce premiums would be to reduce the house's value and space by filling in the basement. However, the premium would still be high, the neighbor said.

Mary Anne Wilder, who has lived in the neighborhood for about 40 years, said although she isn't in the same position as her neighbors across the street, she is concerned about the current rates and what that might mean if she ever tried to sell the house.

"Our daughter has been pleading for us to move and there will be a time when we're not young and can't drive a car. We can't sell our home," she said.

These concerns represent a national problem. According to a September article in the Insurance Journal, one of the representatives the bill was named after, expressed concerns about the increased costs.

Rep. Maxine Waters, D-Calif., told the Insurance Journal that she was "outraged by the increased costs of flood insurance premiums that have resulted from the Biggert-Waters Act." She said she never intended for premiums to skyrocket.

Beth Ryan, spokeswoman with the West Virginia Attorney General's office, said the office is aware of the concerns with the Biggert-Waters Flood Insurance Reform Act.

"We are analyzing the implications of the act on West Virginia citizens and property owners," the statement says. "To date, our office has not received any complaints."

Grishaber said many people are getting letters from the insurance company telling them to get elevation certificates, which can hurt or help them.

This certificate will have the base flood elevation, the lowest floor elevation and the highest floor elevation.

Grishaber said Kanawha County has 90 minus rated structures where the building is insured but people are paying a higher rate for various reasons. He said these residents are getting letters asking to call and set up times to meet and review the structure to see what they can do to improve their situation.

There are a few things people can do to help decrease their rates, Grishaber said. He explained people can get an elevation certificate and sometimes, the solution can be as simple as elevating an air conditioner or furnace.

However, it may not make a big difference to everyone.

Grishaber said one Clendenin resident was told to take out an expensive loan to fill in the basement and raise the remainder of the house two feet above the base flood zone to get a lower rate.

He said if that resident did so, she would end up owing $140,000 on a $50,000 home, while cutting her living space in half.

Grishaber said people also may call their municipality's flood plain administrators if they have questions and they will assist residents the best way they can.

The attorney general's office encourages people to contact the Consumer Protection office at 1-800-368-8808 if they experience substantial increases in flood insurance because of the act.

For Holmes, he hopes a solution will come up so he won't have to lose his home.

"I love this neighborhood and I love this house and now, I'm going to lose it before I can enjoy it," he said. "It's disheartening. I never know when I go to work if I'm going to get a call saying I have to get out."

Contact writer Andrea Lannom at [email protected] or 304-348-5148. Follow her at www.twitter.com/AndreaLannom.

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