The Tribune Democrat, Johnstown, PA

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March 24, 2014

Flood-insurance reprieve may be brief

— Melissa Uzelac thought it was bad enough paying $1,000 a year for flood insurance on a home she owns in working-class Woodvale.

Then, because of a 2012 law seeking to pull the government’s Flood Insurance Program out of debt, the annual cost to insure it rose to $7,000 last year.

“Outrageous,” she said.

A similar outcry nationwide has prompted lawmakers to roll back premium costs in high-risk zones to 2012 rates. But for many policyholders such as Uzelac, it may be a temporary reprieve, soon to be replaced by smaller but still significant hikes, lawmakers admit.

The exact effect on Pennsylvania’s 34,400 flood-insurance policyholders is uncertain. But the new law, signed on Friday by President Barack Obama, appears to cap annual premium increases at 18 percent for most residential homeowners in high-risk areas, compared with the higher increases.

For business owners, the cap will rise 25 percent annually.

Disasters such as hurricanes Katrina and Irene prompted the changes.

Congress pushed the Biggert-Waters Flood Insurance Reform Act in 2012 because the nation’s flood-insurance program was $25 million in debt.

When it passed, the bill’s supporters said disaster payouts were often boosted by inflated local market rates in coastal towns. The law’s changes also increased rates in small towns and river cities across the country, sparking outrage nationwide.

The U.S. House and Senate both worked to enact delays. The bill earned bipartisan support in both chambers.

U.S. Sens. Robert Casey Jr. and Pat Toomey of Pennsylvania both supported the plan.

“These affordability measures will help ensure that we have a strong, sustainable flood insurance program that does not hurt local property markets or burden homeowners with unaffordable premiums,” Casey said.

U.S. Rep. Keith Rothfus, R-Sewickley, and 306 members of the House backed the plan, saying it provided “needed relief” while working to make the Flood Insurance Program solvent.

U.S. Rep. Bill Shuster, R-Hollidaysburg, cast a dissenting vote. Multiple attempts to reach Shuster’s office for comment were unsuccessful.

FEMA data show 471 policyholders in Johnstown will still face rising premiums due to the recent law changes. Many of them are businesses.

“This doesn’t solve the big problem,” Uzelac said. “How does someone in an area like Johnstown sell their home or business when it means paying $1,000 a month just on flood premiums? It’s one thing if you’re talking about a beach house – but this is Johnstown.”

In Cambria County, 34 other communities also have territory in high-risk flood zones. There are 36 in Somerset, including Somerset Borough and Windber, which has 103 homes in high-risk territory, the data show.

Jim Brett, president of Brett Insurance Agency of Johnstown, said some questions remain unanswered.

It could be a while before those who’ve been hit with massive rate increases see their rates rolled back, he said.

“We still don’t know how FEMA will implement the changes,” Brett said. “We still don’t know how long it will take before these new guidelines take effect.”

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