Nevada set to see higher flood-insurance costs
March 24, 2014
List of federal flood insurance policies in Nevada
Following are the figures for Nevada cities and unincorporated parts of counties with federal flood insurance policies subsidized under the National Flood Insurance Program, according to documents at the Federal Emergency Management Administration reviewed by The Associated Press.
WASHOE COUNTY215 32 18321% $3.8 million 1,014$258.9 million $756,849
DOUGLAS COUNTY129 2710212% $2.9 million 1,115$300.2 million $781,072
CARSON CITY, CITY OF 96 31 6515% $521,051 644$160.7 million $522,549
LYON COUNTY 27 9 18 7% $167,209 364 $80.4 million $227,347
LAS VEGAS, CITY OF 24 14 10 3% $2.3 million 764 $216.5 million $385,372
YERINGTON, CITY OF 10 3 7 9% $86,447 109 $22.9 million $64,485
FERNLEY, CITY OF 6 4 2 7% N/A 82 $20.5 million $31,854
STOREY COUNTY 1 0 1 0%$40,962 217 $41.5 million $109,120
The first column is the location.
The second column is the number of polices receiving rate discounts as a result of federal subsidies as of Dec. 31, 2012.
The third column is the number of policies facing annual increases of 25 percent.
The fourth column is the number of policies facing annual increases of up to 18 percent.
The fifth column is the percentage of total policy holders in the community who will face an increase of up to 18 percent or more.
The sixth column is the total amount of claims paid since the community joined the federal program.
The seventh column is the total number of policies in the community, including those that are not discounted.
The eighth column is the total insurance coverage among policies in the community as of Dec. 31, 2012.
The ninth column is the total insurance premiums among policies in the community as of Dec. 31, 2012.
RENO — Washoe County emergency manager Aaron Kenneston has known since Hurricane Katrina slammed into New Orleans and Superstorm Sandy wreaked havoc on the East Coast that Nevada homeowners and businesses eventually would face higher premiums for federal flood insurance.
"It's unfortunate that you have to balance these major superstorms on the backs of taxpayers who don't live anywhere near the Gulf Coast or Hurricane Alley," Kenneston said.
Hundreds of Nevada residents will see such premium increases in the coming years due to changes in the National Flood Insurance Program.
For years, the federal government subsidized flood insurance on homes and businesses built in the days before flood zones were created. But premiums collected haven't covered the payouts, leaving the National Flood Insurance Program $24 billion in debt.
President Barack Obama on Friday signed a relief bill that erases the immediate pain of dramatic flood-insurance hikes included in a 2012 bill passed by Congress that was meant to reflect the true risk of flooding and end subsidies. Still, policyholders are facing large, repeated rate hikes over the years.
In Nevada, about 1,300 flood insurance policies will see increases. Of those, more than 900 homeowners will see their premiums rise by up to 18 percent each year, and nearly 400 businesses and owners of second homes will see increases of 25 percent annually.
Washoe County, Reno and especially Sparks are among the areas that could feel the sting of rate hikes, according to an Associated Press review of records from the Federal Emergency Management Agency.
The analysis shows more than one-third of the 383 owners of subsidized policies in Sparks can expect 25 percent increases in their premiums. About one-fourth of the 1,161 policyholders in Reno and one-fifth of the 1,014 in rural Washoe County face increases of up to 18 percent each year.
"I'm concerned we could start to price people out of the market who really should have flood insurance," Kenneston said.
Kenneston and insurance agents said it's hard to persuade people to buy flood insurance if it's not required by a mortgage lender.
The Reno-Sparks area has experienced significant floods at least once a decade since the 1950s — the biggest a New Year's Day flood in 1997 that caused $1 billion in damage across six counties, $700 million in Washoe County alone.
"It is a citywide concern," Sparks city spokesman Adam Mayberry said. "The 100-year flood seems to come around every 10 years."
The effects of the rate increases won't be clear until FEMA adopts regulations to implement the changes, but the association of Nevada Independent Insurance Agents is starting to hear concerns and plans to launch a series of classes to help educate its members.
The impact will vary across Nevada. For example, unincorporated areas of Clark County had 3,675 federal flood insurance policies in place on Dec. 31, 2012, but only 100 of them were receiving the discounted rates and will be subject to increases.
Wilkins said most people who need flood insurance don't find the cost to be prohibitive, typically about $500 annually for a homeowner.
After the 1997 flood, he said his company paid a $500,000 claim to one Sparks business that had an annual premium of $2,300 and a $1 million claim to another that paid about $6,000 a year.
"You could spend about $30,000 over 10 years and get a half-million dollars back," he said. "Because it is a guarantee the river is going to flood."