An Update on the Flood Insurance Premium Increase
Category : Southwest Florida
As you may know, Southwest Florida homeowners have been dreading news about an impending flood insurance premium hike that will take place for most homeowners starting in 2014.
Under the terms of the Biggert-Waters Flood Insurance Reform Act of 2012, rates were raised for the National Flood Insurance Program. Many premium changes have already been implemented, especially for owners of business properties with subsidized rates. The biggest change, though, is yet to come – an across-the-board rate hike for subsidized and non-subsidized homeowners in the amount of 20% per year over the next five years.
The key to the dilemma involves new flood maps that show many homes at lower elevations, subjecting them to a bigger threat to flooding – on paper, at least – that justifies higher rates.
Since Florida is home to 37% of all flood insurance policies, our state will endure the worst of the change, a change that will eventually impact millions.
There is a chance that these insurance hikes will impact home sales, too, in a market that can’t afford to stall its real estate recovery.
There is a chance, though, that key aspects of the law could be changed or reversed. Two laws have been introduced in Congress to fix key problems. These, however, will not be taken up until next week at the earliest and won’t repeal the law in its entirety even if they pass. And given the drive in Congress to cut debt – especially for the NFIP, which is in debt by $24 billion – there is a chance that the laws could be defeated.
Southwest Florida homeowners need to prepare themselves for premium hikes if they have not already been affected by talking to flood insurance agents and real estate agents, particularly if you want to buy new properties in the area.