Flood Insurance Premiums Rising Along New Jersey Coast

Hundreds of New Jersey flood insurance policyholders will soon be facing higher premiums spurred by sweeping changes to the federal law that will take effect Tuesday.

The increases stem from legislation passed in June 2012 that requires all flood insurance policyholders to pay more into the deeply indebted system, with rates reflecting a property’s true flood risk. The higher rates will only affect properties that have federally subsidized insurance rates, which are typically older homes or houses that have the highest level of flood risk.

Nationally, 19 percent of all flood insurance policies will be affected.

But an analysis of Federal Emergency Management Agency data conducted by The Press of Atlantic City finds policyholders in New Jersey will feel a disproportionate effect of the higher rates.

FEMA says most primary homeowners won’t feel the effect of the changes until they sell their houses or let their flood insurance policies lapse. If that occurs, the new insurance rate will reflect the full price of the flood risk, which in some cases for houses lowest to the ground could be more than $10,000 per year.

But policies for second homes, houses that have been repeatedly flooded and businesses will see sharp rate increases, potentially exceeding $10,000 per year, the newspaper analysis found.

More than 1,600 primary homeowners in Atlantic City and more than 1,000 in Little Egg Harbor Township will be affected by the new rules. Of the 10 towns in New Jersey with the most affected primary homeowners, seven are in South Jersey, and nine of the 10 towns with the most secondary homeowners affected are also in that region.