Biggert-Waters Flood Insurance Reform Act
Posted by Benjamin Dona on Saturday, October 12th, 2013 at 1:21pm.
October 1, 2013 was the day that the largest increases in flood insurance kicked in. Florida's governor, Rick Scott, and Attorney General Pam Biondi are filing a "friend of the court" brief in support of Mississippi's challenge to the 2012 Biggert-Waters Flood Insurance Reform Act. If you own an older property that has been subsidized for years, then your subsidy is gradually being phased out to the tune of 20-25% rate increase each year.
If you purchased a home after July 2012, then your renewal could have no "phasing" and is most likely subject to a huge increase in your rates. There is one reported rate increase of a policy that was $1,800 in 2012 and is now $14,000 in 2013. Over 40% of all the nation's flood insurance policies are in Florida and 270,000 of those are subsidized, mainly homes where there were no flood maps in the past. Pinellas County (St. Petersburg area) has more than 50,000 older policies – the most of any Florida county. According to Florida's Insurance Commissioner, Florida has paid in four times more than what Floridians have received in benefits from the National Flood Insurance program. The change in the law was to refill the coffers after Hurricane Katrina forced FEMA to borrow $18 billion from the Federal Treasury to stay solvent.
Many of the older policies will have the most dramatic increase once the home sells – which could be disastrous for the existing owners. Real estate agents should be giving every potential buyer the new disclosure regarding flood insurance whether or not the home is in a flood plain to be on the "safe" side of liability. Click here for a copy of the new form.
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