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.