Biggert-Waters, the 2012 Federal Law that ended government subsidized flood insurance has paralyzed the purchase and sale of older homes at the beach....we need a closer look.
As reported in today's Tampa Bay Times, a relatively new waterfront homeowner was interviewed. It appears that government financed flood insurance (which is only $250,000 of coverage) is going up to $44k a year from a prior rate of $4,300 with a FEMA alliliated subsized policy. Shocking, unfair, abusive?
Will this house which was rececently purchased for well over $600,000 naturally go into foreclosure because that $44k in after tax personal dollars must be spent on flood coverage? It would seem so if you just read the headlines but read on. The article points out later that private flood insurance is available for $9100 a year.
My take on this is that $9100 a year is the market rate so why buy government backed insurance? No one likes to pay more for anything that what we would like pay but if we rely on the real market, that is what we must pay if we want or need the coverage.