By
TIM FAULKNER/ecoRI.org News staff
The
state is urging residents, especially those in flood zones, to buy flood
insurance. But is flood insurance good for the environment? Will it be so
expensive that it forces property owners to forgo coverage?
In
an era of more intense weather, heavy rains and violent storms are causing more
flooding and damage to property. Hurricane Sandy, tropical storm Irene and the
flood of 2010 are no longer considered anomalies.
To
help manage costs for residents and the government, RIEMA wants more owners and
tenants to get protection. According to REIMA, less than 4 percent of the
state’s 500,000 homes and business have flood insurance.
The
average annual premium is $1,200 for a building in a flood zone and $125 for
buildings in low-risk areas. Coastal homes, however, have much higher premiums.
Coverage of $250,000 for a building and contents costs $7,137 a year. Flood
insurance for renters also is available, for about $125 a year.
The
cost, however, is expected to climb. Beginning in 2014, rates will climb 20
percent and increase annually during four subsequent years. The increase, as
dictated through the federal Biggert-Waters
Flood Insurance Reform Act of 2012, seeks to curtail mounting costs to run the federal program.
Due to more intense storms in recent years, premiums have fallen well short of
expenses, creating an estimated $30 billion deficit.
Since
1968, the heavily subsidized national flood insurance program only charged
about 45 percent of the actual cost to policyholders. The new rates shift most
of the cost onto policyholders. In high-risk areas, rates will climb for new
homes, homes sold to new owners or if a mortgage is refinanced. Most property
owners who receive federal disaster aid will be required to get flood
insurance.
Critics
say higher flood insurance rates will discourage development in flood zones, a
prospect that environmentalists generally favor because it helps protect areas
such as environmentally sensitive wetlands. However, higher premiums may also
encourage homeowners to go without insurance, which shifts clean-up costs to
taxpayers.
Beardsworth
said the higher rates aren't intended to promote a retreat from flood zones;
it's about cutting costs. "I think every individual situation is
different," she said. "We can't tell people what to do. (Home owners)
have to run the numbers and make the decision that is best for them."
Hurricane
Sandy and subsequent storms have likely changed the shape and breadth of
high-risk areas. Updated flood maps showing the new flood zones are expected
this summer. The current and eventual new zones are online at floodsmart.gov.
Targeted
zones seeking to clear development from large areas hasn’t taken hold in Rhode
Island. Gov. Lincoln Chafee said it would be a legal mess for the state to buy
threatened waterfront structures as New York has proposed.
Flood
insurance for property owners and renters is available through local property
and casualty insurance agents. Rates are the same regardless of the agent. A
standard homeowners policy doesn't include flood insurance.
“The
bottom line is we’d love to see everyone have flood insurance,” Beardsworth
said.
