It’s not only April’s Fools Day today, but unfortunately you can expect rising flood insurance rates starting today. Because FEMA is about $24 Billion in the red due in part to hurricanes Katrina and Sandy, Congress ordered full implementation of the Biggert-Waters Flood Insurance Reform Act of 2012 which will make homeowners in flood areas eventually pay for the actual risks of flooding instead of being subsidized by the Federal government. The full implementation has been delayed since 2012 because of the effect it would have on home sales as well as the effects of increased insurance costs to homeowners. Not everyone will see rate increases because only about 20% of flood insurance policies are subsidized. However if the home is a second home, then rates will increase by 25% every year until the rates match the actual costs of the insurance. If the home is occupied full-time by an owner, rates will increase 10% a year until the rates match the actual costs of the insurance.
FEMA has designated the entire state of Florida as a flood zone with varying levels of risk. Hillsborough County flood maps are available online. Hillsborough County residents enjoy a 25% discount on their flood insurance policies each year because of its excellent FEMA Community Rating System (CRS 5) rating. The Class 5 CRS rating saves the average property owner more than $100 per flood insurance policy each year in high risk areas.
Hurricane season starts on 1 Jun in Florida. It’s a great idea to discuss flood insurance requirements with your insurance agent, but it’s also important to discuss flood insurance with your real estate agent.
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