Insurance costs increasing

At a time when most people can’t afford any additional expenses, flood insurance deductibles are increasing. Effective October first, both premiums and deductibles with The National Flood Insurance Program will change.   

If you carry flood insurance through The National Flood Insurance Program your premiums will increase by 8 percent.  On top of the rate increase, $500 dollar deductibles will increase to $1000 and $1000 deductibles will increase to $2000.  The National Flood Insurance Program is operated by FEMA.  “If they can pay an additional $500 to $1000 per claim and you multiply that by the thousands of people with flood insurance, it cuts their losses quite a bit,” said Maurice Stephens, Allstate Insurance Agent.

There’s help available. You can establish a Catastrophe Savings Account to pay for the deductibles if a disaster hits. This works for flood insurance, but also for high wind deductibles.
“So, if you have a $200,000 dollar home and you have a five percent deductible, you’ve got a $10,000 dollar deductible that you have to deal with first before you even have a claim,” said Stephens.  “Also, especially in times like this, you don’t have $10,000 just sitting there in disposable income.“

You can set aside the money in an interest-bearing account and it must be labeled a Catastrophe Savings Account.  The account is not taxable and you can deduct it from your state taxes.
Depending on the deductible amount on a policy, homeowners can contribute up to $15,000 dollars to a Catastrophe Savings Account.

“We’ve been fortunate where we haven’t had any hurricanes of recent when the insurance companies have really pushed those deductibles on everyone,” said Stephens.  “So I don’t really think a lot of people really understand how that’s going to affect them until that storm hits and then they’re stuck holding this big repair bill on their roof and they don’t have the disposable income to repair it.“  The program insures more than 46 billion dollars in property in sc.
   
Check with your insurance agent about the premium changes and any state or federal bank about the saving’s account.

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