Flood insurance premiums increase, flooded Texans still searching for relief

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Effective April 1, FEMA is rolling out changes in the National Flood Insurance Program. With these changes, premiums will increase an estimated average of $866 to $935 per policy, or an average increase of 8 percent.

Including the surcharge for the Homeowner Flood Insurance Affordability Act, the total amount customers are billed will increase an average of 6.9 percent. 

The rate increases are part of gradual insurance increases established by the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014. Flood insurance is a federal product, it is not included in a regular homeowner’s policy.

The recent changes were announced in September of 2017. FEMA hopes these changes will double the number of flood insurance policies.

But for some property owners in the town of Smithville in Bastrop County, flood insurance premiums have been increasing at such a significant rate that they’ve dropped their policies entirely. 

Bobby Hennesey moved into his home on Seventh Street in Smithville in 1985. Starting in 1998, their property has flooded seven times.

In 2015, their flood insurance policy cost them $430 and they filed claims for damage from two floods that year. But the following year, their policy skyrocketed to $2,296, so they dropped it.

“In our minds, we couldn’t afford to continue to pay over $2,000 just for flood insurance,” Hennesey said.

Hennesey applied for FEMA relief after Harvey, but his income as a teacher was just enough to disqualify him.

“We don’t look forward to any more Harveys but with the weather in Texas the way it is, who knows what’s gonna happen next,” he said.

When Hennesey moved into his home, he didn’t experience any flooding nor did city leaders or neighbors warn him about the potential of flooding. In August of 1998, his family experienced 17 inches of rain in 24 hours.

Then in July of 2013, they received 6 inches of rain in a 10 hour period. Hennesey believes changes in the installation of State Highway 71 and construction nearby blocked the old drainage pathway, sending more water into his neighborhood.

When Hurricane Harvey poured 28.3 inches of rain on his home over a four day period in 2017, Hennesey’s only form of flood insurance was the plastic containers he’s now grown accustomed to packing all his possessions in when it rains. But the water even got into some of those containers and left him with $10,000 in damages.

“That has brought our home values down way below market, so selling your home actually means losing money,” Hennesey said, explaining he feels stuck in the home he built.

A FEMA spokesperson tells KXAN that the premium increases Hennesey experienced are both normal and legal. In fact, others are experiencing similar increases across the country. 

The National Flood Insurance Program offers a Preferred Risk Policy which is a lower cost insurance option that covers homes and apartments that have low to moderate risk of flooding in areas outside of floodplains.

A FEMA spokesperson explained that you can lose a PRP policy due to filing two or more claims or due to canceling your policy. Losing a PRP policy can result in a major change in insurance premiums. FEMA recommends that property owners with concerns about their properties can seek help from their insurance agent and from community officials.

 A FEMA spokesperson said it is to homeowners’ advantage to not let their flood insurance policies lapse. There are older flood rates which policyholders can be grandfathered into, but letting your policy lapse forces your rate to be evaluated based on actuarial tables and changes flood zone locations. 

The city of Smithville is putting in work to help out Hennesey and more than a hundred of his neighbors. Smithville City Manager Robert Tamble explained the city is working on a detention pond near Hennesey’s home.

The city has to install a  pipe to allow floodwater to travel from Seventh Street into the pond. It’s a 1.2 million project, and the city plans to pay for 25 percent of it. 

“I don’t want any of these people’s houses to flood again,” Tamble said, explaining that many other residents besides Hennesey have faced insurance issues in the wake of recent flooding and have seen their premiums increase significantly.

Tamble hopes the detention pond will be complete by this summer.

Also later on this year, a group of university researchers may come together to offer property owners a more detailed picture of their flood risk.   

UT Austin Engineering professor Ben Hodges said that most people don’t understand the full risk they face living in the 100-year floodplain. For example, Hodges noted that if you have a 30-year mortgage on a home in the floodplain, it means you have a 26 percent chance of flooding over those 30 years.

“Texas is subject to extreme events, while the chance of an event repeating itself exactly is low, the chance of similar events is high,” Hodges explained. “What we need to think about are the extreme events and how a property or neighborhood could be subject to extreme events that are possible in the long term.”

Hodges added that climate change may mean more extreme weather and moisture in places we’re not planning for. 

He plans to work with a consortium of academics from across Texas looking at weather risk this year. The hope is that their efforts will be funded by the Texas General Land office by this fall. Ultimately, Hodges hopes to create a modeling system that gives Texans more accurate numbers about their storm damage risk based on previous storms.

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