There has been alot of press and news about flood insurance rates and the negative impact on the real estate market. The Biggert-Waters Flood Insurance Reform Act of 2012 authorized the National Flood Insurance Program for 5 years until Septemeber 2017. The Act itself is quite extensive. In summary the major changes affecting Florida properties are as follows;
1. removal of subsidized rates(pre-FIRM Rates) Built Before Decemebr 31, 1974 by 25% a year until actuarial rates are acheived.
a.any residential property that is not the primary residence of the individual
b. any property with severe repetitive losses
c. any business property
d.any new policy or lapsed policy
2. Increase the limit of annual rate increases from 10 to 20 percent.
3. New flood mapping
The residential properties we are seeing being severly affected are those that are built before 1975 that are below the base flood elevation. On average we are seeing homes in areas with a base flood elevation of 10 feet that are actually built 1- 1.5 feet below the base elevation. Premiums are increasing from $1500 a year to $3500 plus a year. (Loss of subsidies and base flood requirement)
Many coastal and beach front homes built prior to 1975 are on average 1-2 feet below the base flood elevation. In addition to alot of these properties being used as secondary and rental homes property owners are being hit with a double whammy.
It is my recommendation that you consult with a licensed insurance agent prior to purchasing a property in Florida.
Their are alot of good deals on older properties. While you may pay less for an older property at time of purchase..the insurancecost could kill you later.
Matt Lehn
Lehn and Vogt Insurance Group
2980 S Mccall Rd
Englewood, FL 34224
941 698 8876
