Flood Insurance Rates Set To Increase

With damaging hurricanes sweeping through Northeast Florida in 2016 and 2017, interest in flood insurance is growing and so are the rates.

Rates for policies through the National Flood Insurance Program, which underwrites most flood policies, are set to rise starting today.

However, the size of the increase is going to be different depending on the circumstances of each property owner.

According to a summary of the changes from NFIP, the average increase will be 8 percent.

That doesn't mean most people will see that kind of increase, though. Local insurance agents and information from Florida Realtors say premium hikes, which are required by law, will be as little as 1 to 2 percent for some properties and as high as 24 percent for others.

Under the change, the rate for a primary residence in an area deemed by the government to be a flood hazard will rise by 5 percent on average. That applies to so-called pre-FIRM properties, which are properties built or substantially improved before 1975 or before the initial Flood Insurance Rate Map was issued for the area by the federal government.

Pre-FIRM properties that are second homes or used for business will see higher increases, possibly close to 25 percent, a release from Florida Realtors said. Those sharp increases have been in place since 2012.

Doug Wiles of Herbie Wiles Insurance in St. Augustine said typical residential rates will increase 1 to 5 percent in most cases. But factors like elevation and age of the home are critical. One foot of elevation can made a big difference in an owner's rate.

But the good news for consumers is that the NFIP has been extended through July 31. That means there's plenty of time for property owners to get policies before hurricane season begins. Buyers must wait 30 days for the policies to take effect unless purchased at the time of closing.

"We have seen more people interested in flood insurance, which I think is a good thing, and not just because we sell it," Wiles said. "Frankly, it's better than nothing.

"We've seen an increase in homeowners who have purchased flood insurance, who have sought us out even before we asked."

That's not too surprising considering the flood damage seen in various neighborhoods around the county.

Dan Alexander of ThompsonBaker Insurance in St. Augustine said most insurance buyers in the area can still afford coverage.

"We do not anticipate any major rate increases or changes in the program," Alexander said in an email to The Record. "If you have an owner-occupied home and live in a low- to moderate-risk flood zone, you can still purchase a policy for $450, which would include $250,000 on the home and $100,000 contents.

"There is definitely more interest in flood coverage since the passing of Hurricanes Matthew and Irma. This will only be more magnified has we head into hurricane season, which is only two months away."

Those in the insurance business worry that some property owners only elect for flood coverage when required to by a lender.

That can be a short-sighted strategy, though.

Roy Wright, who oversees the Federal Emergency Management Agency's NFIP, said in a Miami Herald interview about four weeks ago that every homeowner in Florida should probably carry flood insurance.

Wright said some people are lulled into a false sense of security because they are technically in a flood zone. But the rain doesn't pay attention to the maps, Wright told the Herald.

Tim Huber of Huber Insurance in St. Augustine said more customers are heeding the advice of Wright and others.

"We definitely saw more interest in flood insurance both immediately preceding and after the hurricanes," Huber said in an email to The Record. "In my opinion, this state is a flood zone, and everyone should carry flood insurance to safeguard their homes and belongings.

"The time to think of it is now ... not during hurricane season when it may be too late. Many, many of our customers were glad they had flood coverage in place in the past two years."