Tuesday, 27 July 2010
Michigan Residents Finding Increased Flood Insurance Costs
Recently, many Michigan residents have become angry with the costs of their high premiums for flood insurance. They claim that despite being in low risk areas, they are stuck with bailing out disaster prone areas. These residents are trying to convince their insurance companies and banks that they aren’t at the same risk of flood as those who live along river basins or on the Gulf Coast.
The recent raise in premiums is due to the Federal Emergency Management Agency (FEMA) updating their maps to show certain Michigan properties as being high risk. This has left citizens angry and incredulous according to The Detroit News.
Residents argue that the recent flood-risk mapping on the shore lines should not be an issue, as Great Lakes water levels have been dipping to historic lows in recent years. This decrease in water levels has affected thousands of miles of freshwater coastline in Detroit’s popular waterside communities and several townships. Despite this knowledge, the Federal Emergency Management Agency continues to map Michigan’s shorelines as being high risk for flooding, which is resulting in costly premium increases.
From 1978 to March of this year, Michigan had remained of the lowest beneficiaries of the National Flood Program. In that period of time, the state has paid 6,414 claims (totaling about $45 million). In comparison, homeowners in Louisiana have had payouts on 315,942 claims, totaling over $16 billion dollars.
Citizens are upset with FEMA’s updated floor maps, because with the new high risk label for their coasts, homeowners will now likely be required to obtain flood insurance, but with little expectation of payout should they actually go through a flood. The rates have increased exponentially, and buyers are surprised to find out that their mortgage lenders are requiring high-premium flood insurance before they will even sign for a home loan.
