Flood Insurance Overhaul Could Significantly Raise Rates for High-Risk Areas

Jul 17, 2017

File photo of flooded homes along Highway 401 in Bunn, N.C.
Credit Jess Clark / WUNC

Congress is debating a bill that would overhaul the National Flood Insurance Program. The move could significantly raise rates for homeowners in North Carolina's highest-risk areas.

The sticking point in negotiating a new flood insurance program is the practice of "grandfathering" in old insurance rates. That means if a homeowner moves into a moderate-risk area, flood insurance rates won't skyrocket if it becomes a high-risk area later because of forces like erosion or rising sea levels.

But the new proposal does away with grandfathered rates. The bill's supporters say people in low-risk areas are essentially subsidizing residents who live in places like the Outer Banks, or along North Carolina's major rivers.

Opponents say it would mean rate hikes of hundreds of dollars a month.

The state Insurance Department declined an interview, but in a statement, Chief Deputy Commissioner Michelle Osborne said lawmakers should keep grandfathering provisions in place.

“The inability to grandfather has significantly devastating economic impacts to the citizens of North Carolina,” Osborne said. “It is important for the real estate market of North Carolina to avoid shock premium increases.”