Flood insurance update 6/12/17
I absolutely understand that buyers are concerned about flood insurance and rightfully so.
Below is a link and I also copied the most important part of a law for you to read.
Still neither you nor me are insurance experts and before you buy you should talk to an insurance company and they can tell you the specifics on a particular property. Each property is different because of age and elevation and zone and and and. So, unfortunately I cannot give you a “one size fits all” answer BUT once you give an insurance company the property address they will be able to give a detailed and correct answer and price for the policy.
Hope this info helps you
Please let me know if you have any other questions or need more info
PREMIUM RATES FOR SUBSIDIZED POLICIES • The new law requires gradual rate increases to properties now receiving artificially low (or subsidized) rates instead of immediate increases to full-risk rates required in certain cases under BW-12.
• FEMA is required to increase premiums for most subsidized properties by no less than 5 percent annually until the class premium reaches its full-risk rate. It is important to note that close to 80 percent of NFIP policyholders paid a full-risk rate prior to either BW-12 or HFIAA, and are minimally impacted by either law.
• With limited exceptions flood insurance premiums cannot increase more than 18 percent annually. o There are some exceptions to these general rules and limitations, The most important of these exceptions is that policies for the following properties will continue to see up to a 25 percent 3 4/3/14 Federal Emergency Management Agency annual increases as required by BW-12 until they reach their full-risk rate: Older business properties insured with subsidized rates; o Older non-primary residences insured with subsidized rates; o Severe Repetitive Loss Properties insured with subsidized rates; o and buildings that have been substantially damaged or improved built before the local adoption of a Flood Insurance Rate Map (known as Pre-FIRM properties).
• In order to enable new purchasers of property to retain Pre-FIRM rates while FEMA is developing its guidelines, a new purchaser will be allowed to assume the prior owner’s flood insurance policy and retain the same rates until the guidance is finalized. Also, lapsed policies receiving Pre-FIRM subsidized rates may be reinstated with Pre-FIRM subsidized rates pending FEMA’s implementation of the rate increases required by the Homeowner Flood Insurance Affordability Act.
Call, text or e mail anytime you have a question. I will be happy to help.
Cell 727 410 7777
Office 727 399 9990
That is the headline you will see in all the newspapers by this time next year.
No, I am not joking or exaggerating.
If the new flood insurance bill is implemented, it will devastate all American coastal towns, with Pinellas County being the hardest hit in all of the US.
If I gave you all the little details this post would be 20 pages long (I have included links for detailed information).
The short of it is:
Flood insurance rates will go up dramatically for properties built before 1975 in an A and V flood zone. Please do not think you are off the hook if your home was built after 1975, there will still be increases.
Here are some examples I got from Holehouse insurance company in Pinellas County. http://www.holehouseins.com/
If you sell your home, here is what the new owner is looking at.
1960 home with a dwelling value of $148,000 purchased on 3/15/2013. Current flood insurance is$1,072. The house is 7 feet below current base flood elevation meaning an estimated renewal of $22,400.
1969 home with a dwelling coverage of $250,000 purchased on 12/31/2013. Current flood insurance rate is $1,980. The house is 4 feet below current base flood elevation meaning and estimated renewal of $8,850
1956 home with a dwelling value of $250,000 purchased on 7/31/2013. current flood insurance rate is $1980. The house is 8 feet below base flood meaning an estimated renewal of $29,100
If you stay in your home
an existing homeowner will pay a 25% a year increase until they reach their elevation certificate rate. Using two examples of Per Firm (built before 1975) homes with current flood policies in an A flood zone and a V flood zone
A flood zone
current rate is $2,000
after 4 years is it $4,883
after 8 years it is $11,921
V flood zone
Current rate is $4,000
in 4 years it is $9,765
in 8 years it is $23,842
Commercial properties are also affected. If you buy oen you will have to pay the highest rate immediately. If you own one already you will see the 25% yearly increase.
Condo associations will see a 25% increase yearly on their flood insurance rates.
Our tiny little Pinellas County has at least 30,000 dwelling that are affected if not 50,000. here is a link to the US FEMA map. http://www.arcgis.com/home/webmap/viewer.html?webmap=e0208985e8e64d44bca999325254ff5b&extent=-106.6909,33.1708,-76.9399,43.9898
Who in their right mind would ever buy or could afford to buy a home for $150,000 with a yearly flood insurance premium of $22,000?
This new bill will make so many homes absolutely unaffordable for people who currently own it and totally unsellable.
So what is going to happen?
SHORT SALE, DEED OF LIEU, FORECLOSRE, BANKRUPTCY.
This will be a freefall in home values. Think about it, once people get the renewal rate sometime during the next 12 month, they will realize that they can’t sell their home anymore and can’t afford to keep it either. They will stop making payments on their mortgage, the market will be flooded with Short Sales etc. Investors will come in and pick up these properties for pennies on the dollar (land value minus cost for tearing down the existing structure).
This dramatic decrease in property values will lead to a huge problem not only for homeowners in Pinellas County (and all coastal areas in the Country) but for the counties themselves. Property tax income will probably be cut in half and counties will have to cut back drastically on the services they offer.
I would not be surprised if we see situations like in Boston and Detroit where Bankruptcy is the only option left.
Keep in mind, commercial properties are also affected by this new bill. Hotels, restaurants, shops , rental apartments etc. will see a huge increase in their policy premiums and they will have no other choice than to increase all their prices to make up for that and maybe cut down on their employees. The cost of living will go up a lot, the unemployment rate will go up, tourist will find other destinations that are cheaper etc.
I can go on forever, but I think you get the picture.
For the last 90 years (since we had the last hurricane hit our area) everybody in Pinellas County thought that the next big flood could devastate the area. Isn’t it ironic that now the next big flood insurance increase will devastate the county ………………
Below is the link to a petition, asking the government to rethink the issue before it is too late
PLEASE sign it and spread the word !!! (find a petition for your county)
This new bill will not just affect waterfront properties, it will affect everybody living in a coastal area or near rivers.
PS. I hear people say that it is “only fair” that people in Florida with their “tropical lifestyle” pay more. Please keep in mind that for all these years Florida has been FEMA’s cash cow and has been paying far more than anybody else. Florida, only gets back 26 cents on each dollar we have been paying into the flood insurance program.
Detailed info and facts about the new flood insurance bill from Holehouse insurance http://shortsalesaintpetersburg.com/wp-content/uploads/2013/09/Holehouse-Flood-Insurance.pdf
Link to Chamber of commerce site. http://www.tampabaybeaches.com/chamber/government_affairs.aspx
NEXT REAL ESTATE CRASH Pinellas County home values drop by 50% overnight.
Please click the link above to get all the information and talking points from Holehouse insurance. The new Flood insurance bill will devastate Pinellas County.