Californians Expect Rising Flood Insurance Costs
AZUSA, CA - FEBRUARY 28: The rain-muddied east fork of the San Gabriel River rushes toward San Gabriel Reservoir in the Angeles National Forest as a storm brings rain in the midst of record drought on February 28, 2014 near Azusa, California. The rain offers some relief to the dry conditions but is not expected to be enough to break the historic drought. A drought-related unseasonal wildfire, the Colby Fire, was accidentally ignited in the dry chaparral vegetation in January, destroying homes and sending thousands fleeing. The charred and denuded hillsides are threatening the homes of about a thousand evacuated residents with rain-loosened mud-ash debris flows. (Photo by David McNew/Getty Images)
Monday, Mar 24, 2014 Updated at 8:25 AM PDT
CAPITOLA, Calif. (AP) - A federal program that for years subsidized flood insurance policies for many home and business owners has become billions of dollars in debt.
For more than 48,000 Californians living near the ocean, rivers and creeks, this means their premiums are on the rise.
Under a new law, those policies could go up by 18 percent each year for homeowners. Businesses will see mandatory increases of 25 percent every year until they drop out of the subsidy program and get a rate based on the actual risk of flooding.
Steven Allen's family for years has run the quaint Venetian Hotel in Capitola and says those hikes are a big concern. His family has owned the Venetian for decades and can absorb the increase, which may price others out of the market.
Copyright Associated Press