The damage done to the Gulf Coast areas since Hurricanes Katrina and Rita is costing homeowners and the insurance industry billions of dollars.
But some possible changes could have an impact on your insurance coverage.
Isidro Cavazos has been selling insurance for 12 years. He says flood insurance is often the policy forgotten about until it’s too late.
Last summer’s destructive hurricane season caused $23 billion in flood damage. Now many are worried the rates will rise to offset those costs.
“Some years they will be raised, some years they will stay the same. But if there is going to be changes made, FEMA will set those rates,” says Cavazos.
While FEMA will pay out $23 billion, it only collects $2 billion from home owners flood insurance premiums.
The rates for flood insurance are set every May first. Cavazos says FEMA hasn’t changed them since 1999. He expects them to rise, but not by much.
“There may be some increases in 2006, more than likely 2007 or 2008. We will just have to wait for the accumulation of the claims of Katrina,” said Cavazos.
That wait could last years because homeowners have two years to file a flood claim. Areas like the Valley, which are near the coast, are more prone to benefit from flood coverage.
Cavazos says you can be denied flood coverage if the insurance company is not affiliated with FEMA.
You do have a 30-day waiting period, before the flood insurance takes effect. So you want to make sure you have your flood policy before the hurricane season starts.
source: http://www.team4news.com/Global/story.asp?S=4475864&nav=0w0v