PORTLAND, Maine (AP) — Thousands of Maine homeowners and businesses could see their rates for flood insurance rise as the federal government attempts to put the troubled National Flood Insurance Program back on sound financial footing.
Most of the communities with the largest number of policy holders seeing rate increases are on the coast, but the problem touches all of the state's 16 counties.
About 3,300 in Maine are among the 1.1 million policyholders nationwide likely to see their federally subsidized flood insurance premiums rise, according to a review of federal data by The Associated Press.
President Barack Obama signed a law Friday putting the brakes on a 2012 overhaul that aimed to shore-up the program by requiring policyholders to begin paying risk-based rates, but the measure merely delays the premium increases.
Homeowners could pay up to 18 percent more annually until switching to a risk-based rate while business owners and those who own vacation homes will see their rates rise no less than 25 percent each year until their premiums reach rates matching what building elevation surveys indicate is the true risk of flooding.
The combination of costlier insurance, along with growing taxes, threatens to price people out of homes that have been passed down through generations.
Wells is one of Maine's hardest-hit communities, with 115 primary residences seeing annual increases of up to 18 percent and 92 vacation homes or businesses seeing mandatory annual increases of 25 percent. Many property owners are renting homes to try to bring in extra income to avoid having to sell, said Bob Foley, a selectman and insurance agent.
"There are a lot of families that have owned their homes for many generations that are seeing the cost of ownership growing to the point where it becomes cost-prohibitive to keep them," he said.
Fred Richardson, who has a home on Drake's Island in Wells, said some of his neighbors are simply dropping their insurance policies, willing to take a risk in an area that rarely sees storm damage. But he said he's keeping his insurance even though his premium is going up 25 percent annually.