There are indications that rising premiums already have had an effect. Records reviewed by the AP show that national enrollment in the insurance program dropped by nearly 80,000 in the 12-month period that ended Jan. 31.
The FEMA datasets analyzed by the AP show that 1,402 communities nationwide have at least 100 homes or businesses facing gradual price hikes. Of those, 765 communities have at least 200 policyholders who will steadily lose their discounts.
While the rate hikes will unquestionably affect the largest numbers of people in subtropical coastal cities like New Orleans, Miami and St. Petersburg, Fla., they also have the potential to deliver crippling blows to old river towns and port cities that have little in common with the eroding beach communities that have earned the flood program so much scorn.
The list includes places Brunswick, Ga., a port city where nearly 1,200 policyholders are set to gradually lose their subsidized rates.
The new legislation will offer temporary relief to people like Ray Bodrey, whose annual premiums had surged from under $700 to more than $4,700 before the rollback.
But if FEMA opts for an average increase of 15 percent each year, his annual payments would top $2,800 within a decade, and keep climbing — rates he says will push the limit of what he can afford.
“It doesn’t help me at all. We’ve still got the same problem,” Bodrey said.
Congress created the National Flood Insurance Program in the late 1960s, in part because private insurers had abandoned the market. Today, in most places, it is the only option for buying flood insurance, which is required for most mortgages on any property in a flood hazard zone.
There are about 5.5 million policies in force today, about 20 percent of which are subsidized.
In its latest overhaul of the program, Congress tried to deal with the affordability issue by including language asking FEMA to “strive to minimize” the number of policies with an annual premium that exceeds $1 for every $100 in insurance coverage.