New Flood Insurance Rates Leave Homeowners With Sticker Shock

In the aftermath of Hurricane Sandy, boats continue to litter Hudson Avenue on November 2, 2012 in Freeport, New York. With the death toll continuing to rise and millions of homes and businesses without power, the U.S. east coast is attempting to recover from the effects of floods, fires and power outages brought on by Superstorm Sandy.

Residents of Valley Stream, N.Y., reportedly face a new headache in the wake of Hurricane Sandy -- a dramatic hike in flood insurance premiums. Though some of the residents have claimed that their Long Island neighborhood has never flooded, FEMA has reclassified the area as a high-risk flood zone. Valley Stream resident Joseph Margolin, who reports seeing his flood-insurance rates soar from $400 per year to $3,400, told cable station News 12 Long Island that the mapping of the high-risk flood zone in his area seems "arbitrary."

Asked about the hikes in an interview with the cable channel Sen. Charles Schumer (D-N.Y.) agreed that premiums like those for a middle class family are outrageous, and will cause even bigger problems for the real estate sectors and homeowners in that Long Island community.

While it's long been the case that FEMA's flood mapping has affected insurance rates, the post-Sandy impact is suddenly leaving many in the East with sticker shock. (Pictured above is a street in Freeport, Long Island, a few days after Sandy struck.) David D. Curti of West Springfield, Mass., recently told a local newspaper that he saw his property reclassified from moderate risk to high risk, even though his area wasn't directly affected by the 2012 hurricane. Curti told Springfield's The Republican that he was quoted an increase from about $450 a year to about $1,200 annually, even though he lives about 30 feet above the Connecticut River.

Those living in the West have seen similar impact from the threat of wildfires, leaving some to opt to go without homeowners insurance rather than pay triple-digit increases in their premiums. A Las Vegas TV station reports of one owner of a mountain cabin threatened by flames who has refused authorities' order to evacuate, and instead is trying to keep flames at bay with a garden hose. KTNV quotes Rodney Giles, 63, as saying that a wall of fire came within 300 feet of his home, but that he plans to hang on until he absolutely has to leave.

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