Peggy Molloy is not a millionaire. In fact, she’s afraid she may soon have to stop paying the mortgage on her home at the Jersey shore and walk away from it.
The Point Pleasant woman lives in an area facing a double-whammy: an increase in flood insurance rates resulting from efforts to bring premiums more in line with their actual cost and new flood maps that increased the predicted risk of her area after Superstorm Sandy. Her home was not damaged in the Oct. 2012 storm, but her flood insurance premium, currently less than $800 a year, is primed to soar to $10,000 to $14,000 a year.
She spoke Thursday at a public hearing organized by U.S. Sen. Robert Menendez, D-N.J., at which he pushed for passage of a bill he introduced that would freeze the insurance price increases for up to two years while the Federal Emergency Management Agency completes an affordability study and certifies that its flood maps are based on the best available science.
“Even as they recover from the worst natural disaster in our state’s history, homeowners are being faced with a man-made disaster in the form of skyrocketing flood insurance premiums,” Menendez said. “This legislation simply provides temporary relief to property owners who played by the rules and are now poised to see their most valuable asset become worthless through no fault of their own.”
That’s exactly what Molloy fears. She says she can’t afford the $100,000 cost to raise her house, nor can she afford the higher insurance premiums that would result from keeping it as is. She also says she can’t sell it to anyone without making costly changes.
“I’m 56 years old. Instead of retirement, I’m looking at starting over again with nothing, and it’s terrifying,” she said. “My nest egg was always going to be my home. If this goes forward I’ll just stop paying my mortgage. What choice do I have?”
Mae Kelleher, a senior citizen from Brick, is also afraid of losing the home she has lived in for 40 years.
“I love my house,” she said. “I was flooded by Sandy, and now my premiums are going to go extraordinarily high.
“I pay $850 a year now,” she said. “If it goes up by thousands, there’s no possible way I can afford it. I’m quite elderly. I don’t know what to do. I have no recourse.”
Menendez said the bill is not just for the Jersey shore. Communities all around the country, including the Gulf coast, the Mississippi River and other flood-prone regions are all affected by the new higher rates.
Opponents say Menendez’s bill simply delays the inevitable: Owners will eventually have to pay the true cost of insuring their property to avoid having the subsidized flood insurance program run out of money. The senator also said he regularly hears from critics that the bill is a sop to millionaires.
He said the majority of owners affected by the higher rates are middle-class Americans who did everything they were supposed to do and are now in danger of being forced out of their homes. His bill would not grant relief to second homes or to properties that have a history of repeated flood damage.
His bill has 28 co-sponsors in the Senate, including eight Republicans. It faces a more uncertain future in the House.