TV-6 Investigates Flood Insurance Reform: Cost To Homeowners - News and Weather For The Quad Cities -

TV-6 Investigates Flood Insurance Reform: Cost To Homeowners

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The National Flood Insurance Program is broke.

Congress passed a fix two years ago, but the reform brings severe sticker shock with it.

A shock expected to trickle through property owners, cities, and potentially, back to taxpayers.

It's the subject of a new TV-6 Investigates.

Over 1,000 properties have flood insurance reform hanging over their heads.

Hundreds more have already seen prices begin to rise dramatically.

Davenport has 622 properties impacted.

Bettendorf has 263 properties which will be impacted by flood insurance reform.

319 properties will be impacted in Rock Island County as well as 251 in Moline.

Homeowners are angry, Congress is trying to fix its fix, and the flood insurance program hangs in the balance.

"At 19'3", at the Rock River in Joslin, I had water that came up through here and stopped right here," says Barstow homeowner Eugene Frels. He moved into his house four years ago. His grandfather finished building it in 1955 and Frels says moving in took no thought.

"I basically inherited the house, and it was a free and clear home, it was just common sense to take advantage of having a property that was without mortgage," says Frels.

The home needed a little updating and Frels wanted to consolidate some debt. He took out a mortgage on the property and was required to buy flood insurance.

"We've changed a lot from when it was grandparents house, you know, you still see a lot of the stuff that reminds me of my grandparents when I'm in the house," says Frels.

The first policy cost him $499 a year, but with flood insurance reform, his new policy increased 265 percent, to $1,819 per year.

Frels feels he shouldn't pay for flood insurance. He says his house has never flooded, even though it's located in the flood plain. His pictures from the spring floods show his house high and dry.

"I'm paying an outrageous premium for somebody else, so that they can pay somebody else's claim."

Frels' home was built before flood maps or flood insurance ever existed. When Congress created flood insurance in 1968, and flood maps began to be issued, buildings already in flood plains were offered subsidized rates. The Government Accountability Office says subsidized rates and huge losses from Hurricane Katrina and Superstorm Sandy created a perfect storm, breaking the bank. As of the end of July, the GAOP says the flood program is $24 billion in debt, and flood insurance premiums can't meet that debt. So congress stepped in and tweaked its program.

"We think that Biggert Waters (the name of the flood insurance reform law) had a good intention, to try to make the flood insurance funds more solvent, but unfortunately, the cost of the premiums is too high," says Illinois Senator Richard Durbin.

The changes started last year. Subsidized policies on businesses, vacation homes, and repeatedly damaged properties have rate increases set to go up 25 percent each year, until the true insurance rate is met. Subsidized policies on homes can be kept until the home is sold, or the flood insurance lapses. Prices on these policies can still increase by 20 percent each year. Durbin says insurance prices need to go up, but the current fix is too steep.

"We still face a problem, the reserve of the flood insurance is not adequate, and we're going to have to acknowledge the obvious, this is a potential disaster which requires a national response," says Durbin.

"I've driven past it hundreds of times before we purchased this home, you would never even think about it," says Jennifer Mackin.

Flood insurance reform has also caught her in a tough spot. She lives near Car Bunk Creek on the north side of Clinton. Her home has a subsidized rate, $1,400 per year. Her insurance agent told her to get an elevation certificate. An official form to determine how high or low a structure is compared to the 100 year flood. She got some good news.

"It stated we're above the required elevation level to be in a flood plain," says Mackin.

Six feet above the 100 year flood in fact. To get out of the flood plain though, Mackin has to apply for a map amendment letter from FEMA. The trouble is, her home is in an unmapped portion of the flood plain.

"It is beyond frustrating, it is frustrating to my bank account," says Mackin.

She has to pay another surveyor to do another study to get her map amendment.

"To be told that I paid $450 and then I pay the $1,400 a year, and then I have to pay an additional $6,000."

She says FEMA should pay for the study. Her plan is to forget about it, and keep paying for flood insurance until her mortgage is paid off. Then she'll drop it.

"There was water ten inches deep in front of the fire station, on the road, there was water in the main field out here that was 28 inches deep, my property was dry," says Frels.

He plans to drop his coverage too once his mortgage is paid off. The solution doesn't solve a long term problem, what to do if he ever decides to sell. Anyone needing a mortgage will have to pay full price on flood insurance.

"This is not a well off area, people that are going to be buying out here, are not looking for $200,000 homes, these are people who are going to be blue collar," says Frels.

A problem thousands of property owners are facing as flood insurance reform takes full effect. The prospect of drowning in premiums to protect against a flood.

The U.S. Senate will debate a bill on Friday potentially pausing all of the flood reform changes.