Residents face flood insurance increases
HONOLULU – Nearly 14,000 federally subsidized flood insurance policies in Hawaii will start to see premium increases as Congress looks to get a federal program out of a $24 billion hole.
Legislation signed by President Barack Obama on Friday means homeowners won’t see premiums jump all at once as scheduled under a 2012 overhaul.
But the relief law calls for insurance rates for owner-occupied homes to increase by up to 18 percent annually, while businesses and second homes will see hikes of 25 percent a year.
On Oahu, home to the World Cup of Surfing, more than 8,000 policyholders face the hefty premium increases.
The hikes would mostly impact homeowners on Oahu’s North Shore, where legendary waves make the coastline a mecca for surfers.
But for anyone who wants a coveted piece of oceanfront property, insurance is bound to be getting more expensive.
“I just had a conversation with a buyer who wanted to buy on the North Shore, and he was really worried about the increases,” said Cathy Possedi, a Honolulu-based real estate agent tor with Hawaii Life Real Estate Brokers. “Eventually you’re going to pay for it.”
Under the new law, someone with a Hawaii vacation home paying $1,200 per year now for flood insurance would be paying $3,600 in five years and over $11,000 in 10, until they drop their subsidy and pay a rate based on the real flooding risk.
“You can imagine what it must be like for a homeowner who’s owned their home for 10 years,” said Ivy Costa, an insurance agent with Liberty Mutual.