The National Flood Insurance Program is going through some changes. There are still some unanswered questions about flood insurance rates, but this is what we know.
In Lansing, most homes and businesses have always paid government subsidized rates. These rates are the same for all homes and all businesses, regardless of whether they are right on the river or on the outer edge of the floodplain.
That changed in 2013. Businesses, second homes, and rental properties are now being fast-tracked to actuarial (or full-risk) rates. These rates depend on how high the lowest floor of the building is in relation to the 100 year flood level (also called the Base Flood Elevation or BFE). The lowest floor includes the basement. All businesses will be required to pay actuarial rates within four years.
Most homes will keep their subsidized rates. For a short time, when a home was sold, the new owners were required to pay actuarial rates, but that was reversed this past summer. Subsidized rates should now be passed on to the new homeowner.
However, subsidized rates for homeowners are also increasing, although not as quickly as rates for homeowners as for businesses and landlords. Rates will increase between 5% and 18% annually beginning in the spring of 2015.