New Flood Insurance Rates Effective October 1, 2013
I thought I’d share something very important that might affect some of you to a great degree. Effective October 1, 2013, homeowners in certain flood risk zones will face potentially higher flood insurance premiums. The Biggert-Waters Act gradually removes and reduces federal subsidies for flood insurance on more than a million homes nationwide. The impact will be substantial for some and will cause their premiums to potentially go up by 600%. Here are some examples; Pre-FIRM Zone AE, $250k coverage on a single family slab on grade house with a standard $2000 deductible, premiums were $2,014. Post-FIRM prices for homes under -1 ft elevation will be $3,222/yr premium, homes under -7 ft elevation $8,965/yr premium, homes under -13 ft elevation, $15,032/yr premiums. Same house in zone VE – Pre-FIRM premium was $4,375, new premiums for -1 ft elevation will be $10,782/yr, -7 ft elevation will be $31,350/yr, and -10ft elevation, $37,658/yr. There is a condo on Maui that was in a low risk zone C, which got remapped into the worst –risk zone AE, their premium went from $31,939/yr to $188,655/yr.
So what does this mean to you? First, you must know your flood zone. Everyone is in a flood zone, but which one is the question. Go to the web site www.hawaiinfip.org, click on the “Flood Hazard Assessment Tool” in the upper right hand corner, then go to the right of the screen. Click on “Layers” and select “imagery”, next click on “Property Search” and, 1) select your County (i.e. Honolulu), 2) enter the name of your street, click on “Street Lookup” A list of addresses will pop up on the screen (if you don’t see it, it may be hidden behind your current screen so move the screen aside and check behind it), scroll down to check your address and click on it. The map will change and show you your parcel with a flood zone. If there are two different flood zones dissecting your parcel, look at what zone covers your building. If the flood zone touches any part of your building, that flood zone will pertain. The “V” zones or “A” zones are your riskier zones. Next, you may need to find out the elevation of your home vs. the flood level elevation for your area. You may need to have a surveyor do this if you fall within these zones. Once you know that, you will find out if your house is above the flood level, or how many feet “below” or “negative” to the flood level you are, thus the negative rating. The more negative you are (say -7ft vs. -1ft) the higher your premium. It may be worthwhile to look into raising your home and building it on stilts to get above the flood level to lower your premiums.
The National Association of REALTORS® is trying to extend the phase in dates for the new premiums in order to get Congress to research a better way to do this. Understandably, a change in premiums from $2014 to $15,032 in one year is going to be dramatic to anyone! Stay tuned for more updates...and feel free to contact us if you have further questions.