Kansas residents brace for flood insurance changes

TOPEKA, Kan. (AP) -- Some Kansas officials, real estate agents and homeowners say the changes to the National Flood Insurance Program, which is drowning in debt, don't match reality in the rarely flooded state.

For years, the federal government offered subsidized flood insurance on homes and businesses constructed in the days before there were numerous rules about building close to the water. But the premiums collected haven't been sufficient to cover the payouts, leaving the program $24 billion in debt.

Congress acted in 2012 to make the insurance rates match a property's true flood risk, though after much criticism, legislators in Washington pulled back a bit this year. Now, instead of facing onerous increases immediately, affected homeowners could see annual premium increases as high as 18 percent year after year. Owners of businesses and second homes face 25 percent increases annually until they drop out of the program and get a new rate based on the actual risk of flooding.

Of the more than 5,500 policyholders in Kansas, 40 percent will likely see rate increases. The state has received a little more than $86 million in claims in more than 40 years from the program, a figure that pales in comparison to the billions to states such as Louisiana, Florida and New York.

Errol Wuertz, a real estate agent in Hays, said Washington should be more realistic in its approach.

"We have not had a flood here in over 20 years. Our rates should stay the same," he said.

Residents along Big Creek in Ellis and Hays in northwest Kansas are seeing rates increase, even though the stream is mostly dry all year and especially during recent repeated droughts.

Marion Dreher of the Bank of Hays said the changes in rates would have the effect of pricing first-time and younger homebuyers out of the market, adding hundreds of dollars to the purchase price and even more in annual insurance rates.

"I just don't understand why there aren't different rates for areas that aren't that prone to flooding," Dreher said. "All these people want is something to call their own."

Linda Finger, planning resource coordinator in Douglas County in northeast Kansas, said the county will send out letters later this spring explaining the changes to those in flood plains.

"That's a large part of the sticker shock," Finger said. "It's one of those things. There is no notice until you have to take action and then you are stuck."

She said one property owner learned of a several thousand-dollar increase when trying to make property improvements.

"It wasn't insignificant at all," Finger said.

Hays, like other communities, have mitigated the flood threat through levees, storm water improvements and restrictive building codes, even using federal funds to buy low-lying properties to reduce the risk. But Wuertz said cities and counties have thin budgets and can't always make the investments.

"When things are tight all over, it's just outrageous to have that done," he said.

Ted Boyle has been president of the North Lawrence Improvement Association for more than 20 years. The area north of the Kansas River has seen serious flooding in the 1950s and again in the 1990, but the risk has been mitigated through controls placed on development and installation of pumping stations and draining.

Boyle said he's expecting residents in the neighborhood to see their rates increase, maybe only a few hundred dollars from the current $350 to $600 range.

"There will be other parts of the nation that will be paying a lot more money," Boyle said. "We'll keep our fingers crossed. You never know with the government."