December 22, 2014
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Rising flood insurance rates

Warwick’s waterfront has long been a preferred place to live.

That’s understandable. Vistas of Narragansett Bay, Greenwich Bay, the Providence River and numerous coves can be spectacular day and night. And there’s so much more. With access to the shoreline there’s opportunity for beach walks, boating, bird watching, fishing and even shellfishing in some locations.

The waterfront is also prone to the effects of Nor’easters and hurricanes. No storm in the last century hit Warwick harder than the hurricane of 1938. Once a resort community with a hotel and numerous amenities, Oakland Beach was virtually leveled. Homes built on pilings on Conimicut Point were found in East Providence. The devastation was horrific, as was the loss of life.

Yet, the waterfront didn’t lose its allure.

By the time Hurricane Carol hit in 1954, many of the homes in Oakland Beach, Potowomut, Conimicut and along coves had been rebuilt. Many were grander than the ones they replaced.

Storms since Carol have taken their toll but, by and large, Warwick has avoided the frontal attack of a major storm. In terms of cost, we venture to guess that the March flood of 2010 that inundated Warwick Mall, the city’s wastewater treatment plant and numerous residents did more flood damage than any storm since Carol.

But that doesn’t mean it can’t, or won’t, happen again. That’s a reason for flood insurance.

But now some officials, as well as realtors, are forecasting that, with flood insurance reform passed last year, many living near the shore will be forced from their homes by rising insurance rates and not rising storm waters.

This hardly seems to be idle talk, with projections that rates for $250,000 worth of flood insurance – the maximum available under the federally-run program – could be as high as $25,000 a year. Under the reform act, subsidies are being phased out and property owners will be faced with premiums based on risk rates. Generally, the lower the livable space of a home is below the base flood elevation, the greater the risk and the higher the premium.

The basis for the law makes sense. Why should the government be subsidizing the rebuilding of homes and businesses in areas that get hit with flooding every three or four years? And why should those in marginal flood areas be paying premiums to underwrite those situated in the face of storms?

What’s happening does make sense, unless you’re one of those homeowners suddenly faced with an exorbitant insurance premium, one that could actually be more than mortgage payments and taxes combined.

We don’t have the numbers but we suspect, with 38 miles of coastline, hundreds of property owners face this possibility. But this is not just their problem; this is a community crisis.

There are means to mitigate premium costs by elevating livable areas. While this may not be practical for some homeowners, we urge those affected to contact the Rhode Island Emergency Management Agency and explore what options they have. And we urge RIEMA and FEMA to have the personnel versed in the program available, not just to answer questions but also assist in keeping their homes affordable for more than just those people who can afford to self-insure.


Comments
2 comments on this item

First, having premium rates mirror the perceived risk seems reasonable. That is how it works with life insurance, in that those with a poor health history pay higher rates. However, unlike flood insurance, life insurance rates do not typically rise once a policy is in place.

"elevating livable areas" seems like a good idea on the surface, but try getting approval from Coastal Resources when undertaking such a task. Miserable, and extremely expensive experience.

The city currently receives real estate taxes from flood zone residents right?

Well what if the resident can no longer afford the rising cost of flood ins and is forced to move out of his home or worse yet.. walk away?

I say 'move out' because homes in flood zones 'do not sell' especially those located in high risk flood zones.

There are more people upside down in mortgages and walking away from their homes then ever before.

Even owners who are NOT upside down but only looking at small profit after a sale are walking away.

Homes outside the flood zone are not a problem when this happens because there's always a solution to keep those tax dollars coming in to the City but if one of those walkers are a resident in a high risk flood zone.... the property does not sell after they walk away.

No real estate taxes will be paid to the Cities if no one is living in the house to pay those taxes.

The cities really need to think about this post because this is where things are heading.

People in high risk flood zones who were paying $500 a year for a flood insurance policy 15 years ago (such as MYSELF) are no longer able to afford flood insurance policy increases.

My flood insurance policy is now up to $2525.00 this year. 2013

I'm retired

100% disabled veteran and on SS now.

Not crying poverty or anything but just giving some examples of folks that may be in the same shoes as I am.

Just about every penny I take in is now going out to maintain the monthly bills.

Just nuts..

The City of Warwick needs to step up to the plate and be the first city to really do something to help prevent flood zone residents from being forced into walking away from their homes or attempting to sell a home that no one wants.

I mean, really Warwick? What's better?

No real estate taxes at all or SOME real estate taxes.

If you're reading this..

Please spread the word on this post to those who claim they really want to help flood zone victims.

Like many others around us..

We got over 9 1/2 feet of water at our house when the big flood hit back in 2010.

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