Massachusetts Wants to Ease Flood Insurance Premium Hike

When Mitch Haddad and his brother began rebuilding their family’s oceanside restaurant in Marshfield, they decided to take no chances.

The restaurant, which had been in the family for more than 70 years, routinely flooded – 25 times in 25 years – and the brothers wanted to make sure the new structure was well out of reach of high waters.

The recommended safe flood elevation was essentially 11 feet above sea level, so the brothers decided to go higher, building at 13 feet. About a year after the new restaurant opened, Mitch Haddad said they were told new federal flood maps now put the safe elevation at 16 feet.

“Even though they told us 11, we said ‘let’s go a little higher,”‘ Mitch Haddad said. “When we were told we were below the standard it was very, very frustrating.”

While the new maps moved the restaurant into a higher risk pool, threatening to more than quadruple their premiums, a law signed by President Barack Obama on Friday rolls back parts of a 2012 overhaul of the National Flood Insurance Program, including rules that would have slammed people with higher rates when their buildings were moved into a higher risk flood zone by an updated flood map.

But the measure merely delays the premium increases that will hit as many as 1.1 million policyholders across the country, including more than 24,000 in Massachusetts, according to an analysis by The Associated Press.

More than 40 percent of the properties with flood insurance in Massachusetts will see their costs go up. Homeowners will see their rates go up as much as 18 percent each year and more than 7,000 owners of businesses and second homes will face an annual mandatory 25 percent rate increase until they switch to a risk-based rate.

The prospect of soaring premiums had already caught the attention of Massachusetts officials, from the state’s Congressional delegation to state lawmakers.

The Massachusetts House this month unanimously approved a bill designed to soften the impact of the federal flood insurance rules on many of the state’s coastal homeowners.

The measure, sponsored by Democratic House Speaker Robert DeLeo, would tie the level of flood insurance that must be purchased to outstanding mortgage balance, rather than the full replacement value of the home.

The bill, which now heads to the Massachusetts Senate, would also prohibit mortgage lenders from requiring coverage for the contents of a home or including a deductible of less than $5,000.

Haddad said he hopes some of the changes in the federal law will help his family avoid insurance sticker shock, especially since they tried to play by the rules.

“We’re very sensitive to the flooding because in the old restaurant we flooded all the time,” he said, pointing to the decision to build even higher than recommended. “To us it was just commonsense.”