Q: WHY ARE FLOOD INSURANCE RATES INCREASING?
A: To price flood policies at “Full Risk” rates and stabilize the federal flood insurance program. Congress passed a law last year to require property owners, who for decades subsidized, to pay a higher rate. The Biggert-Waters Flood Insurance Reform Act of 2012 went into effect October 1, 2013 and could impact approximately 270,000 Florida property owners with flood zone revisions and rate increases.
Q: WHO WILL BE AFFECTED THE MOST?
A: Owners of property in high risk areas, such as older oceanfront condos and inland home on the banks of streams and rivers face a substantial increase for flood coverage that is required by the mortgage company. Businesses and older primary residences that have had prior severe or repeated flooding will gradually lose their subsidized rates and will face a rate increase of 25% a year until they reach full risk rates.
Q: WHAT IF MY PRIMARY HOME IS CURRENTLY RECEIVING SUBSIDIZED RATES?
A: Approximately 100,000 older primary residences will keep their subsidies but they will face a rate increase starting October 1, 2013, averaging 20%.
Q: WHAT IF I SELL MY HOME?
A: The buyer will have to pay the full risk rates for any new policy. This could be substantially higher rate than the seller of the home is currently paying. *Policies that have lapsed will be subject to the new rates.
Q: WHAT IS AN ELEVATION CERTIFICATE AND WHEN IS IT REQUIRED?
A: An elevation certificate is conducted by a licensed surveyor and determines if the home is above or below base flood elevation. The higher the house is elevation above base flood, the cheaper the premium. In zones A and V, an elevation certificate will be required to quote the flood coverage. These are special flood hazard areas and prone to moderate to severe flooding. You can also obtain an elevation certificate for all other zones but will only lower the premium of the house if in a positive elevation. The approximate cost for an elevation certificate is $250.00 and can be conducted by any licensed surveyor.
FACTS BY THE NUMBERS:
$16.1B: Flood insurance premiums paid by Florida property owners since 1978-2011
$3.7B: Total flood claims paid to Florida policyholders since 1978
$16B +: Flood claims paid to Louisiana property owners since 1978, mostly for Hurricane Katrina
$2M: Total Florida flood policies, roughly 40 percent of all policies nationwide
268,646: Federal flood insurance policyholders in Florida who could face sharply higher rates, more than any other state.
No. 1: Pinellas County’s ranking among counties across the nation with almost 51,000 affected properties, roughly an eighth of its homes and businesses.
Important new flood maps will be available soon on www.Floodsmart.gov where you can put in a zip code or address to see if the home is in a flood zone. Homes with flood zones “A” or “V” will require an elevation certificate (which on the average costs $250) which can be done by a surveyor.
Should you have any questions of how this may affect your policy or need assistance, contact your insurance agent or contact our Preferred Insurance Partner:
Mary French, Tami Medel or any of the other agents at:
Patriot Insurance Agency, LLC
Serving the State of Florida
With Offices in Orlando, Palm Beach and Naples.
407-694-1776 Orlando
561-694-1776 Palm Beach
877-694-1776 Toll Free
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