The News Courier in Athens, Alabama

State and Nation

July 29, 2013

Coastal Alabama braces for flood program changes

MOBILE — MOBILE, Ala. (AP) — Flood maps aren't due out for Alabama until next December, but the specter of rising flood insurance premiums is undeniable.

Congress, seeking to undo the damage done to the National Flood Insurance Program after 2005, changed the policy to impose more stringent regulation on subsidies and second homes.

And those changes have painted a bull's eye on the state's two coastal counties.

The exact number of residents who may be affected among the 26,935 policies in Baldwin and 9,305 in Mobile, remains up in the air until neighborhoods adopt the new flood insurance rate maps needed as a part of changes to the program.

Officials with the Federal Emergency Management Agency, which runs the program, estimate about 2,063 in Mobile and 1,702 in Baldwin.

Those numbers may seem low when you apply them to the entire counties, said Gerry Springer, an insurance agent with First Baldwin Insurance in Foley. "But if you looked at the coastal population, those numbers may be 90 percent of the entire coastal population."

Number one on the list are second homes with subsidized premiums and older properties in areas where there has been "severe repetitive loss." Premiums will rise as high as 25 percent every year until the property owner is paying the market rate for flood insurance.

Homeowners who have filed claims for past flood-related damage in excess of the market price of their home will fall into that pile, too. Before the changes to the program, rate hikes did not exceed 10 percent.

The changes, some say, may upend entire communities — especially people who planned to live out their retirement years on the beach.

"By changing the flood program they've set up a lot of people for failure," Springer said.

In fact, for a long time, the now-beleaguered flood insurance program was a valuable subsidy for consumers and the government. For many years since it began in 1978, premiums outweighed claims.

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