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Here's why some homeowners will see flood insurance rates increase

The federal flood policy program is getting a makeover based on risk. If you are a higher risk, you will pay more.

CHARLOTTE, N.C. — Starting Oct. 1, flood insurance premiums may increase for people who live in a zone that tends to flood more often. This is a big deal because 74% of flood policyholders will see an increase and the jump may be significant based on the risk.

Flood insurance is required in some places; homeowners who live near a river or a creek that can flash flood during heavy rain is one example where it's needed, along with homes situated along the Carolina coast. But why are the rates going up?

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“FEMA’s maps are anywhere from 10 to 50 years old, they have simply not kept up with the realities of climate change,” said Nick Vinzant, an insurance expert at QuoteWizard.  FEMA’s new rules are based on historical rates of flooding, and they will cost 74% of North Carolina residents as much as $100 more per month depending on where you live or choose to buy a home.

On the flip side, if you have flood insurance as just another layer of protection for the worst-case scenarios and live in a place that wouldn’t typically flood, you’ll be in the 26% of the population that will be paying less.

“What’s now going to be happening is that you are going to be paying based on the historical risk of flooding at your house and the cost to replace it,” said Vinzant.

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Experts say climate change is making the 100-year flood event a five-year event, costing everyone billions. Fortunately, there are some tools to help homebuyers plan for these decisions. Mecklenburg County has an interactive map showing the flood risk for different properties based on location, allowing those on the house hunt a way to figure out if they will need to purchase a policy.

Where do the Carolinas fall in terms of cost? South Carolina is the 4th cheapest state to get a federal flood policy, while North Carolina has an average yearly cost of $733, or $61 per month.

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Federal flood policies cap at $250,000 of building coverage and $100,000 of contents coverage. Flooding covered by the policy includes overflow of tidal water in coastal areas, rivers, and mudflow.

Contact Bill McGinty at bmcginty@wcnc.com and follow him on Facebook.

WCNC Charlotte is always asking "where's the money?" If you need help, reach out to the Defenders team by emailing money@wcnc.com.

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