If you have flood insurance, you may have recently received a notice showing just how much more you have to pay. It’s an increase insurance experts say is impacting the majority of policyholders.
A couple of years ago, the Federal Emergency Management Agency announced it was making changes to have rates recalculated. Since then, the prices of nearly everything have gone up.
That’s made the situation worse. Projections showed when FEMA made changes, 80% of Texans would pay upwards of $10 more per month, or about $100 a year.
Instead, the Insurance Council of Texas says the majority of Texans are actually paying about $15 more per month, or nearly double what FEMA projected.
Leaders say it’s because of inflation. As home prices have climbed, so has the need to charge more for insurance.
FEMA explained the price you pay is impacted by three things. It depends on how close you are to a flooding source, the number of times you’ve flooded, and how much it would cost to rebuild your home.
Insurance leaders said FEMA made the changes because the old way it calculated rates wasn’t working.
“In the past, they were actually paying out more in claims than they were getting in premiums, and that’s just not a way to do business,” Insurance Council of Texas spokesperson, Rich Johnson, said. “You look at it, and you know it’s the federal government. They’re not looking to make money like the private industry might be, but it’s still a financially sound model that they feel that they put together.”
If you didn’t get a notice in the mail, maybe it’s because you don’t have flood insurance. This is separate from your homeowner’s insurance. We are in hurricane season, but if you call your provider, you can’t get it right away. It takes 30 days. This is why it’s important to make that call now.