Homeowners oppose flood insurance rate hikes at forum in Seminole
More than 500 Pinellas County homeowners and realtors worried about upcoming hikes to flood insurance rates packed an auditorium at St. Petersburg College in Seminole last night. Next Tuesday many rates go up because of the Biggert-Waters Flood Insurance Reform Act of 2012. Congress passed the Act to help finance the National Flood Insurance Program, which went into debt after Hurricane Katrina in 2005. It removes federal subsidies from properties in flood zones leaving a large cost burden on the homeowner. Panelist Tim Fellabaum represents the Bankers Insurance group. He says Florida and Pinellas County in particular are extremely vulnerable to the new changes.
And Pinellas County has the largest impact in the country. So over 50,000 subsidized policies in Pinellas County which accounts for 39% of all the flood policies, so from density standpoint Pinellas County is the most affected county in the nation.
George Shaeffer is a homeowner in Redington Beach. He says his flood insurance has been running him 2,000 dollars but the new rate will cost him16,000 dollars a year. He says he wants to put his house on the market but knows hes facing a difficult time ahead.
I have no idea what Im going to do. They have no idea what to tell me to do. Im basically between a rock and a hard place and it looks to me like the property will either go into a short sale or quite possibly just foreclosure.
To make matters worse Shaeffer has been disabled for 13 years and is on a fixed income that will never increase. He says the new insurance hike will affect his livelihood.
$16,000 a year just for flood insurance and thats a quarter of my income, and then I have to pay Citizens (insurance) and my homeowners insurance and the regular mortgage plus, of course, my medical and car insurance as well as medication and I would like to eat, and also manage to keep my 19-year-old car running.
Another Pinellas resident, Larry Belanger, bought a foreclosed house to rehab in 2011 thats five houses away from the water. He says once he renovated the house and was ready to sell he realized the new rate hikes would cause trouble but he didnt know just how much trouble until he spoke to his insurance company.
So the insurance came in at $45,663 a year. $45,663 a year -- that is from the insurance company thats not a guesstimate thats after the elevation. This is not a disaster this is a catastrophe. I know of other people, realtors who had their sales squashed. You will not be able to sell thousands of homes in Pinellas County just when it was recovering because of this insurance.
Pam Dubov is the Pinellas County Property Appraiser. She says that the end of the flood insurance subsidy will initially cause the real estate market for beach-front properties to be in a panic.
And if you talk to realtors who you know that if they sell property primarily on the beaches that many sales are falling through and contracts are being canceled when they find out what the premium is going to be on a house that used to have a premium of a couple of thousand dollars.
One of these realtors is Michael Pino who has been selling water front properties for the past 5 years in St. Pete Beach. He says many of the homeowners that hes sold homes to will be unable to maintain their insurance payments and will have to sell. But selling wont be easy because of the anxiety that has set in.
Oh yes, we have many cancelations of contracts, cancelation of viewings - Nobody can afford to buy these homes that are not built up.
The Tampa Bay Beaches Chamber of Commerce, which co-hosted the forum, urged homeowners and realtors to reach out to their state and federal representatives to get Congress to reverse its decision. Senator Bill Nelson has asked for a delay to the rate increases, but says it will be difficult to get Congress to act.