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Pinellas County FL to be hardest hit

Why are flood insurance rates rising?

To more accurately reflect the risk of flooding, the Biggert-Waters Flood Insurance Reform Act of 2012 calls for eliminating some artificially low rates and discounts.

Will everybody’s rates go up sharply?

No. In fact, the biggest rate hikes focus on just 20 percent of flood policies in the country, those covering older properties in low-lying areas (called a Special Flood Hazard Area) for which owners have been paying cheaper, subsidized rates. The affected properties date to before Flood Insurance Rate Maps were adopted in the 1970s and 1980s.

What about properties within Tampa Bay?

Florida is the hardest-hit state and Pinellas County is tops with more than 50,000 subsidized flood policies that could face significant rate hikes. That translates to about 35 percent of all flood policies in the county.

Among other bay area counties: more than 14,000 Hillsborough policies (or 21 percent of all flood policies) are subsidized; in Pasco, it’s more than 11,000 policies (36 percent); in Citrus, about 2,900 policies (41 percent); and in Hernando, about 1,000 (22 percent).

I’ve heard some property owners will face 25 percent annual increases for several years? Who does that affect?

• Owners of investment properties that have been subsidized with lower rates already started paying the higher rates on policy renewals after Jan. 1.

• Owners of businesses and nonresidential properties with subsidized rates will see the higher rates effective Oct. 1.

• A subsidized property that has experienced severe or repeated flooding will see the higher rates kick in Oct. 1.

What if I live in my home and currently benefit from subsidized rates on my flood policy?

If you continue to live in your home and don’t sell, you most likely will be able to keep the lower, subsidized rates with the higher premiums phased in. The phase-in rate for a subsidized homeowner in an A or V flood zone is 16 or 17 percent annually until the rate is determined to be at full-risk.

However, you could face the big jump in rates if the property is sold, the policy lapses, you file severe or repeated flood losses, or a new policy is purchased.

Is that all?

No. Subsidized homeowners will also have to pay a new 5 percent charge into a reserve fund for future flooding losses.

I don’t live near the beach. Do I have to worry?

Among the many misconceptions about Biggert-Waters is that it mainly affects beachfront property owners. To the contrary, many of the subsidized properties are inland in Pinellas County, county Property Appraiser Pam Dubov says.

How do I know if I get subsidized rates now?

Check with an insurance agent. But there are two main clues: Is the home in an “A” or “V” zone requiring flood insurance and is it at least a few decades old? It depends on when your community first created flood maps. Any flood-prone home built before 1975 predates flood maps in Tampa Bay and is likely subsidized. The earliest flood map in Pinellas County dates to May 1970 in St. Pete Beach.

I’m in an A or B hurricane evacuation zone. Does that mean I’m in a high-risk flood zone?

Not necessarily. Evacuation zones and flood zones are not the same. So don’t use the zone listed on county property records as a basis for your flood zone. Best bet: Ask your insurance agent.

What if I have a subsidized policy in a flood hazard area and I sell my home or business property?

The buyer of a subsidized property will have to pay the full-risk rate for any policy issued or renewed on or after Oct. 1. That could more than triple the rates immediately. If you bought a subsidized property after the Biggert-Waters Flood Insurance Reform Act became law July 6, 2012, you could have to pay the full risk rate for a policy renewal starting in October.

I’m with a condominium association. How does this affect me?

Stay tuned. FEMA has not yet determined new rates for subsidized condos or multifamily properties.

I have flood coverage though I’m not required to do so. Am I in the clear?

Not entirely. Even nonsubsidized homes could see rates rise 6 to 9 percent.

Can property owners with unsubsidized policies face a large rate increase?

Yes. All property owners could face rate increases of up to 20 percent a year for five years if a community adopts a new flood insurance rate map as part of the program overhaul.

Can I do anything to fight higher rates?

Obtain an elevation certificate to show how high your home is compared with flood levels. There is an initial cost, but it may help reduce your rate. Review your flood zone maps to see your property’s current flood risk and how close it is to a potential change in risk status if a new map is adopted.

And don’t let your policy lapse, which could be a trigger for a big rate increase.

Has this changed sales contracts?

The Florida Board of Realtors recently changed its standard sales contract to let buyers know they may need to get a flood certification to obtain flood insurance. New contract language makes a buyer’s offer contingent on obtaining flood coverage by a certain date at a price not to exceed a cap that is written into the contract. Moreover, the buyer and seller have to agree on when the contract can be terminated if the property is ineligible for flood insurance.

Have banks adapted as well?

All mortgage lenders have greater financial incentive to make sure that homes in flood zones carry the required coverage. Previously, the government imposed a fine of $350 per loan that did not have the required policy in place. That rose to $2,000 per loan under the new law. A total fine cap of $100,000 per lender was removed so now there is no cap.

Where can I find more details?

Go to Or contact your insurance agent.