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Monday, April 13th, 2015

Millions facing higher premium rates for flood insurance

Author:     FRANK ELTMAN
Source:     The Associated Press
Publication Date:     Apr 12, 11:34 AM (ET)
 Link: Millions facing higher premium rates for flood insurance
Stephan:   Here is the next data point on my trend analysis, and my prediction concerning the role of the insurance industry as it faces the reality of climate change. In the U.S. alone over a trillion dollars worth of coastal high-end real estate is doomed, and the same is true all over the developed world. People like to have properties on the coast; it is always very beautiful. The collapse of that market is going to have a profound effect on the U.S. and world economies, and it will start with insurance, just as described here.
The devastation of Superstorm Sandy months after the event. Credit: www.consumerreports.org

The devastation of Superstorm Sandy months after the event.
Credit: www.consumerreports.org

MINEOLA, N.Y. (AP) — A $24 billion sea of red ink has millions of Americans in vulnerable flood zones, including homeowners still struggling to recover from Superstorm Sandy, facing steep increases in flood insurance premiums.

New legislation that went into effect this month — the second time in two years Congress has tweaked the troubled National Flood Insurance Program — allows rate increases of up to 18 percent.

“This appears to be death by a thousand cuts,’” said Scott Primiano, an Amityville, New York, insurance broker who has been holding seminars for clients to explain the new legislation. “The concept sounds good, but no one can say what the full risk is. … They are going to take it in bits and pieces every year and it keeps going until Congress determines we’ve had enough.”

Federal Emergency Management Agency spokesman Rafael Lemaitre said the flood insurance program has for decades been paying out more than it took in, […]

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