EDISON - Homeowners in coastal areas of New Jersey are facing a difficult choice in the wake of Hurricane Sandy: spend money to rebuild their homes now, or face dramatically higher flood insurance rates later.

A Kane In Your Corner investigation finds homeowners could face premium increases of as much as $8,000 a year. The reason is twofold. On Jan 1, the federal government will begin phasing out flood insurance subsidies, starting with owners of second homes. Also, Federal Emergency Management Agency released a new flood map last week that shows New Jersey's coastal flood risk is worse than previously believed.

The new map will not affect flood insurance rates yet, but FEMA expects that it will starting in 2014. Homeowners who do not raise their homes to the recommended elevations will pay higher premiums because of the increased risk.

Robert Pakstis of Union Beach says he would have to raise his home 11 feet, at a cost of over $100,000. But if he doesn't, he says FEMA told him his flood insurance premiums could rise from $1,500 to $9,500 a year.