As flood insurance premiums creep higher, the Federal program that provides flood insurance to 5 million policyholders is about to expire. If Congress doesn't take action to reform and reauthorize a program that is $24 billion dollars in debt, the housing market may suddenly find itself in deep water.
The increase in flood insurance premiums is bad enough. They are going up about 6% a year according to FEMA. The average premium is $878 not including whatever surcharges may apply. FEMA says high-risk properties, second homes, and properties with previous flood claims could see bigger increases.
FEMA has been gradually raising rates as part of a previous reauthorization of the program five years ago. Those rates were adopted to help bring the cost of reimbursement closer to the cost of flood damage, but are far from enough to get the program out of debt.
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