Big jump in Natomas flood insurance premiums is temporary
mweiser@sacbee.com
Published Tuesday, Oct. 26, 2010
Many Natomas residents saw their flood insurance bills jump sharply this year, the result of a bureaucratic bind. But the increase is temporary.
The Federal Emergency Management Agency on Dec. 8, 2008, removed its 100-year flood protection rating for Natomas and remapped the region into a "special flood hazard" zone. This made flood insurance mandatory for about 26,000 Natomas property owners.
A cheaper "preferred risk" policy – about $340 a year – was available to those who purchased flood insurance prior to the remapping. Rep. Doris Matsui, D-Sacramento, persuaded FEMA to extend the cheaper rate for a second year for policies renewing in 2009.
But when these property owners renewed in 2010, the insurance shot up to a standard rate, which is about four times more expensive.
Natomas homeowner Rick Benstead saw his bill jump in August from $342 a year to $1,344.
"That was a shock," said Benstead. "Already we're underwater on our mortgages out here in Natomas, so this is an added expense."
Some property owners avoided the increase because they purchased flood insurance just days before the Dec. 8, 2008, remapping date. Because there is a 30-day delay before coverage starts, their policies did not take effect until January 2009, and the two-year discount period is still running.
In June, Matsui persuaded FEMA to extend the preferred risk rates for another two years, starting Jan. 1.
This means that for Natomas property owners whose flood insurance increased this year, it will go back down to the preferred rate in 2011, said Jana Crutchfield, FEMA's regional flood insurance specialist.
For those who avoided the increase this year, they will continue at the preferred rate for an unbroken total of four years, Crutchfield said.
Anyone who must renew at the higher standard rate this year can save money by reducing coverage levels, as Benstead did. Or they can eliminate coverage of dwelling contents, which is not mandatory, resulting in a one-year policy of about $900.
Relief beyond 2012 may come from a bill Matsui has co-sponsored. HR 5114 was approved by the House in July and is now before the Senate.
It would allow flood insurance rates to increase after a remapping by only 20 percent annually. This would be retroactive to 2008, so Natomas property owners would benefit. It also would allow low-income residents to pay in installments rather than paying all at once for the year.
Call The Bee's Matt Weiser, (916) 321-1264.