FEMA Delays Flood Insurance Rate Hikes

Plans to increase flood insurance rates for southeast Los Angeles have been delayed at least until July 6, 2000, after residents complained that their insurance costs would soar. The Federal Emergency Management Agency decided to extend until next year the lower “preferred risk” flood insurance rates for a 66-square-mile zone that includes Long Beach, Bellflower, Compton and 11 other Los Angeles communities.

The decision marks the second time the agency has backed off on plans to increase rates to about $595 per $100,000 of coverage, compared to the preferred rate of $221 per $100,000, after naming the area a new flood hazard zone. Rates were previously scheduled to rise July 6, 1998, but that hike was called off after community protests.

The flood-hazard-zone designation means that people borrowing money to buy or refinance a home within the zone are required to obtain flood insurance.

The government is afraid that the Los Angeles River and its tributaries could flood the zone while improvements are being made to the area’s levees.

Residents who bought policies before July 6, 1998, when the rates were originally scheduled to go up, will be able to renew their policies at the preferred rate, said Jack Eldridge, chief of the community mitigation program for the region. Residents with such grandfathered policies who have already renewed their coverage should contact their insurance company or agent to arrange a refund.

People who purchased insurance after July 6 or who have not yet purchased insurance will be able to buy coverage for the standard rate, typically $306 per $100,000 of coverage.