Flood Insurance Changes - Why Is The Media Ignoring This Impending Disaster?

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!

 

 

 

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Debbie Reynolds 08/29/2013 02:44 PM
  2. Gabe Sanders 09/02/2013 07:58 PM
  3. Robert Bob Gilbert 09/08/2013 09:02 AM
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Rainmaker
929,420
Bob Ratliff
Robert Ratliff Realty - San Antonio, TX
"Sold with Bob"

Barbara Jo, just like all good things the price must go up just like real estate. It's sad but I guess they're just trying to cover their losses over the years? Great information and this should be featured.

Aug 29, 2013 09:55 AM #9
Ambassador
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Florida Tolbert Team Keller Williams Advantage
Keller Williams Advantage III Realty in Lake Nona - Orlando, FL
Keller Williams Land Division Specialist

We too heard about this today and I for one am glad I am concentrating my business on the West Side of St Lucie West and well inland of the beaches.

 

Aug 29, 2013 11:37 AM #10
Rainmaker
1,434,247
Yolanda Cordova-Gilbert
Richmond, TX

Barbara Jo,

 I did know that they are redrawing their maps because as of right now we have to say we are not currently in the flood plain! That is a huge increase we did see a small snipet in the news here!

Aug 29, 2013 11:44 AM #11
Ambassador
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Barbara-Jo, I haven't heard about this at all. That is a tremendous increase of premiums yet I understand they have had tremendous losses.

Aug 29, 2013 01:27 PM #12
Rainmaker
375,616
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411

Barbara-Jo, that's a big, sudden increase, but aren't the premiums based on the best actuarial estimates of loss?  CO residents shouldn't have to subsidize coastal property owner's flood insurance.  And FL residents shouldn't have to subsidize CA earthquake insurance.  But I do understand it's a sudden shock and may decrease market value of flood-prone property.

Aug 29, 2013 03:42 PM #13
Rainmaker
3,223,602
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Barbara Jo, seriously this is the cause and effect of BS by politicians....he who gets payola wins>>>> the lower middle class looses...

Aug 29, 2013 03:47 PM #14
Rainmaker
2,277,084
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

I am doing a mortgage on an ocean front home in MA. The flood insurance was $3100, the quote for the new premium is $5450. We own an ocean front home, have never had a claim, we are going through the same kind of increases.

Aug 29, 2013 07:45 PM #15
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Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

wow, thanks for all of the wonderful comments!

Aug 29, 2013 09:52 PM #16
Rainer
279,481
Sue Ellett
Better Homes and Gardens Real Estate ~ Paragon Property Group - Marble Falls, TX
Marble Falls, & Austin, TX, Lake Travis, Lake LBJ

Great Post !  In our area, in the Central Texas Hill Country, we have a 7 lake chain along with many, many rivers and creeks, so we are highly affected by these new flood insurance changes, so it is not just coastal areas who need to worry.  The increased premiums are likely to impact waterfront sales throughout the US in all affected floodplain areas.  Increased rates and no more grandfathered properties mean big bucks all around. 

Our area recently had revisions made to the floodplain maps, too, so homeowners who have never needed insurance in the past now do.   I have one property I am getting ready to list that is surrounded by a wet weather creek on two sides - totally in the flood plain and they didn't know it.  

 

Aug 29, 2013 10:48 PM #17
Rainmaker
653,763
Christine O'Shea
Christine E O'Shea Broker-Associate - Naples, FL

Barbara Jo, I went back into my emails and NABOR did send out an email linking to the FL Realtors Site regarding the Flood Insurance.  My apologies, I must have been super crazed that day and did not open it.

Aug 29, 2013 11:51 PM #18
Rainer
103,157
Rosie Moore
Serving Sugar Land, Richmond, Rosenberg, Missouri City - Sugar Land, TX

Thank you so much for this update. I was unaware of the changes that go into effect October 1.  I used to be a tv news reporter back in the day.  I will definitely pass this story idea to the local media, as well as inform my buyers of the change.

Aug 30, 2013 03:41 AM #19
Rainer
390,315
Jean-Paul Peron
The Outer Banks Real Estate Copmpany - Corolla, NC
Carova Beach - Living & Working in 4-Wheel Drive

This has also been a big concern for us selling on the Outer Banks, although I have to admit that is doesn't seem to affect the part of the OBX that I sell in.

We have tried getting organized to make these changes known and have run into the same issues & concerns that you have.

Aug 31, 2013 02:09 AM #20
Ambassador
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Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

thanks for all of the wonderful comments.

Aug 31, 2013 09:41 AM #21
Rainmaker
3,841,243
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good morning Barbara-Joe,

I was sure the flood maps would be re-drawn and insurance rates would go up but they are really making this happen quickly and spiking the rates awfully high rather than a gradual increase. With the losses that have of occurred suddenly they were bound to take action to cover the vast claims. Living on the coast anywhere in the US is now going to come with a huge price for property insurance. It will be the price one pays for the luxury of coastal living.

Sep 02, 2013 08:29 PM #22
Ambassador
2,081,119
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

Dorie - Our redrawn flood maps are still not available and the changes are just over 3 weeks away - makes you wonder!

Sep 03, 2013 02:23 AM #23
Rainmaker
484,423
Ricki Eichler McCallum
CastNet Realty - Corpus Christi, TX
Broker,GRI,ABR, e-Pro, TAHS

Thank you for the information.  It can happen quickly when REALTORS sit back and do nothing.  HOpefully, we can get this changed.

Sep 08, 2013 09:34 AM #24
Ambassador
2,081,119
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

I don't see that happening since there is no real momentum to even delay this at all....

Sep 08, 2013 11:50 PM #25
Rainer
5,912
Milinda J. McGraw
M.J. & Associates - Hanson, MA

We just lost 2 closings today because our client got an updated flood insurance quote and it was $2,000 a year in August and today it was $49,000.00 a year!  Yes, you are reading this right, $49,000.00!  We thought it was a mistake but after the third quote came in at $65,000.00, we knew we were in trouble.  Something has to be done and why isn't this on the news?  Why isnt anyone signing the petition?   We are in Massachusetts and this property only has vague water views from the 3rd floor.  I am beyond baffled!   https://petitions.whitehouse.gov/petition/fix-nations-flood-zone-information-flood-insurance-rules/Yvp8nYYw

Oct 24, 2013 01:13 PM #26
Ambassador
2,081,119
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

OMG, that is ludicrous!!! What is wrong with our government that they would allow something like that?

Oct 25, 2013 12:09 AM #27
Rainmaker
842,825
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

With world weather changes and increase flooding the money has to come from somewhere. These homes will just adjust in price to reflect the costs. Here in Ct many of the coastal homes are being elevated to keep the insurance premiums down and the home values up. 

Nov 11, 2013 09:50 PM #29
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