COLLEGE PARK — Flood insurance rates are going up.

Congress moved to close a $27 billion deficit in the National Flood Insurance Program last summer by eliminating federal subsidies and requiring rates to reflect each property’s actual risk of flooding.

“People like to live on the shore. It’s like the American Dream,” said Dave Bollinger, an outreach coordinator for the Federal Emergency Management Agency, which runs the program. “But (they) also have to accept the responsibility to pay for it.”

By federal law, owners must purchase flood insurance if their property has a federally backed mortgage and is in a flood hazard area. The federal government is the sole source of flood insurance, and more than 73,000 properties in Maryland have policies, according to Bollinger.

Under the Biggert-Waters Flood Insurance Reform Act, officials will draw new flood-plain maps to identify locations with severe and repetitive flooding and set rates accordingly. The new maps will be based on historical and current data, so they won’t take into account the anticipated future impact of rising sea levels, Bollinger added.

Nationally, annual premiums for flood insurance that cover a coastal structure and its contents now range from $130 to $8,000, according to the NFIP website, depending on the age of the building, its design, location and flood zone.

As the new rates are determined, they will be phased in over four years, with a maximum rise of 25 percent each year to cushion the impact.

The first 25 percent rate hike went into effect Jan. 1 but applied only to nonprimary residences, such as vacation and rental homes, that had subsidized insurance rates. This October, rates will increase for businesses with subsidized premiums and for single-family homes that have repeatedly flooded.

Not everyone will see a rate hike. For example, those who have raised their homes or businesses above the 100-year flood level could see their rates go down.

Environmentalists hail the legislation as an economic deterrent to development in high-risk coastal areas. But the higher rates also could hurt lower-income residents in coastal communities.

“Those in lower economic situations are going to have some decisions to make,” said Matthew Wall, the Hazard Mitigation Program Manager with the Virginia Department of Emergency Management. “The question could be, ‘Am I going to buy flood insurance or my necessary prescription?’ A lot of difficult choices will need to be made.”

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