Home Insurance Rates to Increase Due to Flooding

city floodFlooding in many parts of the United States is expected to increase by 45% by the year 2100. This was taken from a report released by FEMA or Federal Emergency Management Agency last June 2013. If this trend continues, home insurance premiums and flooding costs will be greatly affected.

Additionally, the report also stated that sea levels will rise by at least four feet by the end of this century. Home insurance premiums paid to the National Flood Insurance Program have already reached $53.2 million last 2009. If the report and findings are correct, it will reach $11.2 billion in 2100. With this happening, NFIP will be facing twice as many homes to cover. Therefore, it will cause home insurance premiums to significantly and rapidly increase.

When Hurricane Katrina struck the United States, it created a door for the NFIP to be in debt of $16 billion. In addition, Hurricane Sandy has brought such debt to rise to $25 billion, which may be impossible to cover by the NFIP alone. Losses are also expected to rise per property to almost 90%.

If this continues to happen, flood and storm victims may be forced to cover reconstruction and remodeling costs on their own. Read the rest of the story by clicking here.

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