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Each year, many Americans may be quite concerned about the cost of their home insurance rising, potentially by significant amounts, based on factors that they may not always understand. But at the same time, millions more are facing rate hikes for mandatory policies that are similar to, but separate from, their standard coverage. As a consequence, it may be incumbent upon insurance agents to let customers who have to buy federal flood insurance know why that's the case, and how that differs from their normal plans.

A new federal law went into effect earlier this month, which allows the National Flood Insurance Program to raise rates for millions of Americans by as much as 18 percent, according to a report from the Associated Press. The idea is that this would potentially improve the financial standings of the NFIP, but some critics say the move is not particularly well-publicized, nor is it fair to people whose rates, in some cases, are going up for no real reason.

""Most of the 30 million homeowners have no idea that their flood insurance is going to rise,"" George Kasimos of Toms River, New Jersey, who founded the grass-roots group Stop FEMA Now after learning of increases in flood insurance premiums, told the news agency. ""The exorbitant rise in flood insurance increases is going to make the 2007 housing bubble look like a walk in the park.""

How will it work?
Specifically, the law will allow the Federal Emergency Management Agency to do a study over 18 months to assess flood insurance affordability, and twice as long (three years) to offer help to people who can't afford their plans, the report said. Until that time, though, some homeowners might be out of luck, and have to pay huge bills or risk running into serious trouble if disaster does indeed strike.

A lot of the consternation people can face when dealing with their insurance may come from a lack of understanding about their coverage and what it entails. As a result, many consumers may start to feel better about their plans just as a result of simple communication with agents to ensure they have at least some knowledge of their plans. That, in turn, is likely to lead to higher rates of customer satisfaction, and even growing client retention rates going forward.

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