FEMA: Flood insurance subsidies drying up

SANDPOINT — Increased flood insurance rates will be a fact of life for some Bonner County landowners, according to the Federal Emergency Management Agency.

Congress passed the Biggert Waters Flood Insurance Reform Act last year, which is designed to buoy the debt-inundated National Flood Insurance Program. An aspect of the act that will touch Bonner County is the elimination of artificially low rates and discounts.

This will be done by phasing out flood insurance subsidies for nearly 70 Bonner County landowners in the NFIP. Subsidies will be scaled back annually by 25 percent until their flood insurance rates reflect true risk.

“We are moving to that full-risk rating. That’s the theme and they need to be prepared,” said Kristen Minich, the flood insurance program’s manager for the Northwest region.

All told, the reform act will affect about 20 percent of the 388 NFIP policies in effect in Bonner County, according to FEMA and the Bonner County Planning Department.

FEMA said flooding is the most common and costly disaster the agency has to grapple with. Moreover, the NFIP has been struggling with a weighty debt burden.

“The program in the past has been operating with a debt of between $17 billion and $20 billion. So, with all these massive storms and catastrophic events, the program has been having to borrow good portions of money,” Minich said.

The first category of local landowners to be effected by the reforms will be those who have secondary residences within Special Flood Hazard Areas.

FEMA deems a residence secondary if the landowners spend no more than 20 percent of the year there.

These landowners will already see their subsidies dry up in 25-percent chunks until their rates reflect true risk.

Landowners with primary residences in Special Flood Hazard Areas will be able to keep their subsidized rates until their property sells, their policy lapses or if they suffer severe, repeated flood losses.

Grandfathered rates and preferred risk policies are still available to landowners who built in compliance to a specific flood map, but Minich said those options will be dimmed out next year.

“In 2014, they’re going to start seeing rate increases by 20 percent until they meet that full-risk rate,” she said.

Minich recommends that affected landowners get in touch with their insurance agents and look into obtaining a surveyor’s certification verifying their home’s elevation.

There are reports that elevation certificates were had typically cost about $300, but now are running at about $1,000.

Bonner County Commission Chairman Cary Kelly said the county may investigate whether its staff could gain an in-house capability to issue elevation certificates to ease some of the burden on landowners.

“It’s at worth at least looking into to see what the possibilities are,” Kelly said.