Flood Insurance Changes - why is the media ignoring this impending disaster? The Biggert Waters Flood Insurance Reform Act goes into effect on October 1st, 2013!
Here is an example of the changes:
A single family home on Treasure Island with a value of $130,000 that currently has an annual flood insurance bill of $1300 will have an annual cost of $5300 for the SAME coverage.
How is it going to work? It is a little complicated but basically, if you currently have flood insurance and you keep it up, your increase will be gradual. If you purchase new, you pay the higher premium! This means that many potential waterfront closings will not be taking place once people realize what they are going to be paying.
In addition to this, lenders who are requiring flood insurance on the property due to the flood zone map location are going to require that the annual flood insurance be paid in full prior to closing!
What I do not understand is why the media is not covering this? My brokerage had a meeting yesterday to discuss this (and the new Florida contracts) and were all urged to sign a petition. We, as Realtors, have been signing petitions on the internet to stop this madness! I realize flood insurance premiums must go up but increases like this will cause many not to purchase in lower flood zones or to let their flood insurance lapse since they cannot afford it anymore!
To make matters worse, Pinellas County is a peninsula on a peninsula, so many parts of our county fall into these lower flood zones. This can be a disaster for the county. So why is the local media ignoring the issue?
FEMA is updating their maps and many areas that were listed as higher, flood free zones are going to be put into more expensive zones. Take the flooding in New York and New Jersey as examples of areas that will have their flood zones changed.
This change in flood insurance rates comes from Congress and is going to take place on a national level. Naturally, if you live in Colorado you are not going to worry about it like you are if you live along the sea coast. If the media covered this people could be writing letters to Congress and petitioning their state representatives to do something! How many of you are even aware that this change is coming? My guess is not many and that is a problem!