SARASOTA, FL-- Homeowners with property in a flood plain are bracing for what many are calling the biggest increase in flood insurance history.
"It's sort of like legalized extortions," says Kelly North, who lives near St. Armands Circle, an area the Federal Emergency Management Agency says has a high risk of flooding.
In 2012 the U.S. Congress passed the Flood Insurance Reform Act, which requires FEMA to make changes to the way the National Flood Insurance Program runs. Which means North and her neighbors will be paying more for flood insurance.
"It could quadruple the rates. I would be spending more on insurances than on my yearly mortgage payment," says North.
And she is not exaggerating. Insurance agent Florence Conlan say the changes to how the government calculates its flood insurance risk will hit homeowners hard. "For someone who's paying $1,900 their premium could go up to as high as $7,500 to $8,000," added Conlan.
According to Conlan the increase is the result of the governments efforts get out of debt by eliminating the flood insurance subsidies that 20% of National Flood Insurance Program customer currently receive.
"These rate are all now going to be actuarally calculated and there will be no subsidies any longer," said Conlan.
There will also be no grandfathering clause. So, those who are a part of the National Flood Insurance Program could see increase that amount to more than 20% a year for the next 5 years.
"Everything seems to be going up with all the new rules and laws and government regulations but everybody needs flood insurance so what are you suppose to do?" said property owner Lisa Alder.
"It is crazy. I think it's escalating so much and I understand companies need to offset the cost when there are catastrophes but there has to be another way of doing it," added North.
The changes to the government's flood insurance policies program will begin to take effect on October 1st.