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March 24, 2014

High waters bring higher costs as flood insurance rate hikes hit Oklahoma homeowners

OKLAHOMA CITY — Though hefty premium increases for flood insurance may become a burden to some policy holders in Oklahoma, it’s necessary to keep the National Flood Institute from drowning, a storm water manager for a southwestern Oklahoma city says.

The federal government for many years has offered subsidized flood insurance on homes and businesses constructed in the days before there were rules for building close to the water. But the subsidies have been costly, the premiums collected haven’t sufficiently covered the payouts and the National Flood Insurance Program is billions of dollars in debt.

In 2012, Congress passed a law requiring approximately 1.1 million subsidized policyholders to start paying rates based on the true risk of flooding at their properties. Congress heard the public outcry and passed legislation — signed by President Barack Obama on Friday — that pulls back on some of the increases. Instead of immediate, onerous spikes, affected

homeowners will see annual premium increases as high as 18 percent year after year. Policies for businesses and second homes will climb 25 percent each year.

“I realize that it will be a burden for some of the homeowners who do not currently have flood insurance on their property,” said Cynthia Williams, stormwater manager for the City of Lawton’s Public Works Department.

Lawton has three major drainage basins that are subject to flooding — East Cache Creek, Squaw Creek and Meadowbrook/Wolf Creek — and the majority of local severe flooding is from heavy rainfall.

“They are built in such a way that it should drain a typical storm, but in flash flooding situations, they sometimes do give out,” Williams said.

Within Lawton, 688 people and businesses have policies and 40 percent of those will see an increase in premiums, according to federal data collected by The Associated Press.

Statewide, more than 4,900 policyholders face up to an 18 percent increase each year, and more than 2,000 policy owners face the 25 percent increase each year, according to the AP’s analysis.

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