Flood Insurance 101 - What You Need to Know Part I

Real Estate Agent with Charles Rutenberg Realty Inc. 516-575-7500 NRDS ID#641625055

Flood Insurance 101 - What You Need to Know


If you live or work in a coastal community, then, no doubt, you've been personally affected by the widespread uncertainty surrounding increases in flood insurance premiums.  


President Obama Signs Flood Bill Into Law


On March 21, 2014, President Obama signed the “Homeowner Flood Insurance Affordability Act” into law. This law repeals FEMA’s authority to increase premium rates at time of sale or new flood map, and refunds the excessive premium to those who bought a property before FEMA warned them of the rate increase. The bill limits premium increases to 18% annually on newer properties and 25% for some older ones. Additionally, the bill adds a small assessment on policies until everyone is paying full cost for flood insurance.


Great South Bay


Sourced from NAR Issue Brief (updated March 7, 2014), there are two noteworthy changes:

The new law will allow for grandfathering (allowed to keep the lower rate) of "Pre-Firm" properties (Pre-Flood-Insurance-Rate-Map properties - in the Town of Hempstead (Nassau County) that would mean homes built before the first FEMA map of April 16th, 1979).

Also, there can be an assumption of policy by the new buyer. 


High-cost areas - anywhere in a flood map where there is more than a 1-in-4 chance a property will flood over a 30-year mortgage, (AE or V for velocity), flood insurance is required.


Low-cost areas - everywhere else on the map (x zone), flood insurance is not required for a federally backed mortgage (GSE, FHA, VA, etc.)


Over the next few years, FEMA will conduct an affordability study.

Where-have-south-shore-buyers-gone-part II -




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David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Always best to check with your local professional insurance company on the flood insurance, ask for an elevation certificate from the seller very important if in a zone A or V.

Mar 20, 2014 07:34 AM #1
Belinda Spillman
Aspen Lane Real Estate Colorful Colorado - Aurora, CO
Colorado Living!

Flood insurance can be such a costly venture.  I always feel so bad for those who are without it and lose everything to floods.  There are only a few places in the Mile High City that fall into the flood plane.  They are usually at the bottom of a reservoir.

Mar 20, 2014 08:08 AM #2
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Jill. Many in the Realtor community are not getting educated enough in their are. When I bring up the topic, many seem surprised  and say they heard something about it. Well done with your post.

Mar 20, 2014 07:17 PM #3
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

David - True. An elevation certificate will give them the base flood elevation of the property and, ideally, the different levels of the house will be 1 point above at a minimum.

Belinda - It turns out you don't even have to be near traditional sources of water. Even snow melting on a mountain and causing a rapid accumulation of runoff water fits into the definition of flood.

Hi Joe - For continuing education purposes, I took a really great & comprehensive 3-hr course.


Mar 20, 2014 11:44 PM #4
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Great post for your area on Flood Insurance. I've written on this subject in Scottsdale as well.  Good to know what goes on so we can be of assistance to our buyers/sellers.  Congrats on your featured post in the LA Times!

Mar 21, 2014 01:09 AM #5
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

Jan, It's a subject that affects a lot of people and every town has their intricacies. Whatever we can learn about this topic and disseminate to buyers and sellers is of value.

Mar 21, 2014 08:18 AM #6
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Jill Sackler

LI South Shore Real Estate - Broker Associate
Long Island Living - Where Memories Are Made
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