The National Flood Insurance Program is drowning in debt. As a result, California residents will begin seeing a rise in flood insurance prices. Hetty Chang reports from Seal Beach for the NBC4 News at 6 p.m. on Monday, March 24, 2014.
Homeowners and business owners in coastal communities across the nation are bracing for pricier flood insurance policies, including those in Southern California.
For years, including some cases as far back as the 1970s, the federal government subsidized flood insurance policies through the National Flood Insurance Program.
But the program is now billions of dollars in debt and is expected to reduce its assistance. For thousands of homeowners, that could mean a rise in their flood insurance policies.
The anticipated increase comes after President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law on March 21.
The law, according to the FEMA website, repeals and modifies certain provisions of the Biggert-Waters Flood Insurance Reform Act, which was enacted in 2012.
In California, nearly 50,000 home and business owners received subsidies in 2012 for their flood insurance. According to FEMA as of September 2013, there were 252, 865 policies in force statewide.
The increase, according to experts, could be 18 percent every year for homeowners.
NBC4 spoke with residents who live on Long Beach's Peninsula, which was just hit hard by flooding in early March.
"It increases the cost of living, it increases the privilege and luxury of living at the beach," Long Beach resident Edwin Shackeroff said.
"The cost of living every single day are going up and up and up," resident Christie Miller said. "Thank God I'm a small business owner and I can just work more."
But small business owners could be hit even harder. Businesses would see mandatory increases of 25 percent every year until they drop out of the subsidy program and get a rate based on the actual risk of flooding, according to a study by the Associated Press.
"We have a lot of water around us that's for sure," said Nigel Ohrberg, a small business owner in Sunset Beach. "I think it would be very difficult to figure out how to cover that. You're not expecting that."
