CIVIC CENTER — The federal government's redrawn flood zones in the wake of Hurricane Sandy are likely to bring big increases in NYC homeowners' insurance premiums, Mayor Bloomberg warned Friday.
New federal floodplain maps are expected to add tens of thousands of previously-excluded homes inside the larger danger zone, forcing their owners to buy expensive flood insurance for the first time, according to the report produced by the RAND Corporation. The report estimates insurance premiums could jump from an average of $430 per year to as much as $10,000 per year for some homeowners.
According to the report, only 35 percent of the homes in the new floodplains currently carry flood insurance.
“For thousands of New Yorkers, the difference in the cost of insurance as a result of Federal policy changes is the difference between being able to stay in their neighborhoods and having to move,” Mayor Michael Bloomberg said in a statement.
Under a new federal law called the Biggert-Waters Flood Insurance Reform Act, the National Flood Insurance Program, which is the primary provider of flood insurance for homeowners and small businesses in flood-prone areas, will no longer be subsidized by Congress, resulting in higher overall premiums. The new premium rates are already beginning to be phased in.
But, FEMA has missed its deadlines for an affordability review of the new laws, and administration officials say it might take them five years to get around to doing the study, which was supposed to be finished in April 2013.
The Bloomberg administration argued that the new federal law redrawing NYC's flood maps should be delayed or modified until the FEMA study is finished to ensure that flood insurance is affordable.
“Congress required that affordability be addressed before the new flood-insurance rules took effect and that has not happened,” said Deputy Mayor Cas Holloway. “Doing so now must be a national priority.”
In the meantime, the administration says it is working to find ways to reduce the impact of higher premiums. It says it’s already worked with FEMA to offer discounts for homeowners who are proactively taking resiliency measures, such as elevating boilers and other mechanical systems.
“We will continue to lobby the Federal government to implement solutions to help New York City residents mitigate the significant rise in their flood insurance costs and help New Yorkers damaged by Hurricane Sandy to recover and rebuild,” said Bloomberg.