FEMA woes heighten concerns about Kennebec Valley flood zone insurance
Photo / Tim Greenway
Patrick Wright, Gardiner economic development director, is among the Kennebec Valley officials who are worried that rising flood insurance rates, pushed higher by recent storms nationwide and expiration of the National Flood Insurance Program, will hamper development in the flood-prone Kennebec River cities of Augusta, Hallowell and Gardiner.
Rising flood insurance rates, pushed higher by recent storms nationwide and expiration of the National Flood Insurance Program, is already having an effect on development in the flood-prone Kennebec River cities of Augusta, Hallowell and Gardiner, the Kennebec Journal reported.
The 50-year-old National Flood Insurance Program, administered by the Federal Emergency Management Agency, goes to Congress for reinstatement at the end of the month. The program, which designates Special Flood Hazard Areas, and requires mortgage holders within the areas to have flood insurance, was originally devised to provide insurance for property in flood-prone areas that insurance providers didn’t want to cover. Initially, it paid for itself through premiums.
According to the Government Accountability Office, however, recent catastrophic storms, particularly Hurricane Katrina and Superstorm Sandy in 2012, have pushed the insurance payouts well above what the premiums cover, and the program is now $25 billion in debt.
No matter what the solution to pay for the programs — possibilities are eliminating the federal contribution, and increasing insurance requirements and restrictions — rates are expected to rise, particularly with the addition of the costs of Hurricanes Harvey and Irma in the past weeks adding to the mix.
While an April 1, 1987, flood that devastated cities and towns along the Kennebec River is cited as an example of what can happen in the region, river flooding on a smaller scale is a possibility every spring during the snow melt.
Patrick Wright, Gardiner economic development director, told the Kennebec Journal that removing the subsidies that make the insurance affordable leaves the stick of the insurance requirement, while removing the carrot of the lower premiums.
Increased insurance costs make it less likely developers would want to invest in property in downtown Gardiner on the banks of the Kennebec River, he said.
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