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National Flood Insurance Rates Set To Increase If Program Is Renewed

National-flood-insuranceThe National Flood Insurance Program is treading in dangerous waters as Congress debates on whether to continue the program and if so, how much should the annual rates be increased. The Senate is debating the potential of 15% annual increases while the House of Representatives looks at 20% increases for homeowners.

That can be a huge cost increase as these costs compound year over year. What this can mean is that based on the House’s proposed increase the rates would increase 298% in 7 years. The Senate’s proposal would increase costs 231% in that same 7 year window. That can be a significant cost.

Of course, the program has lost 18 billion dollars over the past few years so the government does need to recoup their losses. And the impact of shutting down the program could be even more extreme for the coastal housing market.

A bill cleared the House in July that would allow premiums to rise by as much as 20% a year, among other changes.

The program’s rates are widely considered to be inadequate for the risk that taxpayers face, but lawmakers have been at odds over how fast and how much they should rise, lobbyists say.

A bill introduced in the Senate would allow rates to rise up to 15% annually. In addition, the Senate, unlike the House, calls for complete forgiveness of the program’s debt.

The Senate Banking Committee is planning to take up its version of the legislation as early as this week. via the Wall Street Journal


  1. Need to find a win/win for everyone…

  2. 18 billion….heh…that's chump change…

  3. Wow, this is just crazy. 231%?

  4. That's a pretty serious increase.

  5. They should find a good commercial insurance company to take on flood insurance. We need flood insurance to be able to finance commercial real estate deals.

  6. So many of the FEMA maps for flood plain around our Maine lakes are all messed up. Someone level with the water is deemed not in the flood plain. Another watefront cottage owner 60 feet in the air is considered in the flood plane. The Corp Of Engineers, National Guard summer work projects could tack these and make them accurate.

  7. Thanks for your post about real estate insurance . Such a big help.

  8. Hi Mr. Tom,
    Thanks for your information about flood insurance.
    It will help us a lot.

  9. National flood insurance is great relief for many and in my view if it is discontinued it will be disastrous for many
    cash till payday

  10. Let the private sector take it over, create some new jobs and reduce the size of government all at once. Win Win

  11. Just what we need, additional rate increases. I agree with the comment above, privatize it!

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