Flood insurance hikes could prove costly for waterfront homeowners
NEW BERN, N.C. (WITN) - A FEMA report estimates one million fewer Americans will buy flood insurance by the end of the decade — which puts more people in coastal communities at risk of financial loss.
Some homeowners here say the claims process was a difficult maze to navigate during Hurricane Florence.
“Well it was not good. We had the highest water we’ve ever had.” Nelson McDaniel says he initially was only given a third of what he had in damage during Florence and had to sue for the full amount.
“The mistake that people make is they think that flood insurance is flood insurance. No it’s a government program to help people out but it has absolutely no relationship to the experience you would have with homeowners insurance,” he continued.
The federal flood insurance program was started when many private insurers stopped offering policies in high-risk areas. And flood research and environmental experts explain the high risk areas have begun to increase.
“And it has had problems because there are properties that experience repeat flooding and those are very costly to the program and there are also places that are flooding now that didn’t flood before,” said UNC Institute of Marine Sciences professor Dr. Antonia Sebastian.
A release of a FEMA report shows more areas at a higher risk of flooding in coastal communities across the country, which Sebastian says results from climate change and the continued building along the coastlines.
“We are building more and more valuable infrastructure in harm’s way. And we’re also seeing increased frequency and increased intensity of storm events,” she continued.
“No one wants to pay higher premiums. For me personally, my greater concern is what you get for the premium. I’m willing to pay for something if I get something for it,” said McDaniel
Ultimately he says he understands the reasons behind the increase, but also hopes the hikes come with more clarity.
The federal flood insurance program operates on what it calls the “risk rating 2.0″ system which it says operates “In the red, paying out more in claims than it collects in premiums.”
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