Flood insurance rates to spike for some policyholders
(Harrisburg) — A federal law, known as the Biggert-Waters Flood Insurance Reform Act, is removing subsidies in the National Flood Insurance Program, and moving it toward a risk-based model. Vice President of Enders Insurance Jim Enders tells witf‘s Radio Smart Talk certain parts of the law take effect today.
“We are now going to have actuarial soundness in the program. The goal is not to have it lose money, that it’s going to break even,” he explains. “In doing that, rather than having subsidies, the consumer is going to end up getting the brunt of it.”
Enders says only the 20 percent of flood insurance policy holders who receive federal subsidies will notice significant changes in their premiums.
But folks who receive subsidies and own frequently-flooded properties will see an immediate 25 percent rate hike. In certain cases, Enders says it will be an annual increase until the policies are deemed actuarially sound.
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