Not all HBG homeowners helped by flood insurance relief law - abc27 WHTM

Not all HBG homeowners helped by flood insurance relief law

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Call it "premium pandemonium." President Barack Obama signed a relief law following a revamp of flood rates that pushed insurance premiums thousands of dollars on top of current rates. However, his life boat doesn't save everybody, especially in Harrisburg.

Who could forget seeing Harrisburg's historic Shipoke neighborhood submerged under water during that soggy fall in 2011?

Of course, three years later the water has receded along Front, Race, and Vine streets, but the wrath of Tropical Storm Lee remains.

Lee, Hurricane Katrina in 2005, Hurricane Sandy in 2012 and other natural disasters sent FEMA and the National Flood Insurance Program drowning under $24 billion in debt. Lawmakers have pointed out that $17 billion was attributed to improper maintenance of levies.

In order to alleviate the costs, lawmakers introduced the Biggert-Waters Flood Insurance Reform Act of 2012. Homeowners were asked to pay risk-based rates to their respective flood-prone areas.

Pennsylvania was the hardest-hit state. With nearly 35,000 policy holders living along the Commonwealth's 86,000 miles of waterways, premiums began to volcano according to Reilly Insurance LLC Agent, Theresa Irizarry.

"The rates were ridiculous, absolutely ridiculous," she said.

The Harrisburg area agent pointed out some of her clients' horror stories.

"We had one policy that went from $2,500 to $13,000," Irizzary said. "From $900, it went to $5,000."

Dauphin County Commissioner George Hartwick III echoed similar stories he has heard from county residents.

"One policy went from $1,000 [or] $1,200 a year to over $5,000" he said. "$5,000 a year to $35,000 a year."

Hartwick spent many days on Capitol Hill in Washington D.C. lobbying lawmakers to act, help residents along the Susquehanna River. He explained the original philosophy was because primary homeowners were paying to bail out million-dollar vacation homes along coastal areas.

"The people who are really hurting are individuals in Lykens Boro, Steelton, Highspire, City of Harrisburg and Shipoke [neighborhood]," he said. "Folks that can barely make their mortgage payments."

Hartwick helped congressional committees craft legislation, now known as the Homeowner Flood Insurance Affordability Act of 2014. On Friday President Obama signed the bill into law. The reform caps insurance rate at 18 percent for homeowners living in a flood-prone zone, under a primary roof. Those with commercial properties, secondary or vacation homes must pay a mandatory hike of 25 percent.

The law does offer homeowners to roll the premiums into their mortgage. Until this point, many were forced to pay the staggering increases up front.

In some areas, like Shipoke, this relief does not apply because the area is labeled as a "repetitive risk" according to Hartwick. About five "For Sale" signs were hung on homes around this neighborhood on Tuesday. Irizarry said she has heard many complaints from people about the real estate market.

"If people don't buy in the city, because they don't want to pay the flood premiums. I can't blame them," she said.

Hartwick said the issue has broader implication on the city and county.

"What do you do, make it a ghost town?" he said. "Does it become like Centralia?"

He explained the new law is a good short-term fix to try to alleviate some pain, but the discussion for a long-term solution must begin now. Obviously, he said it is too early to tell how the new law and premium increase will impact municipalities and the county economically, but people ditching homes along waterways will decrease the tax base.

Hartwick said if people living on high-ground away from creeks and streams will eventually feel the pinch.

"This is everybody's issue, because as those properties become devalued and local governments are reduced in revenue, all taxpayers in the entire region are going to be forced to have to make up the share of loss and assessment," said Hartwick. "So it's everybody's problem."

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