President Obama Signs New Flood Insurance Law

The Homeowner Flood Insurance Affordability Act was signed today by President Obama.  This bipartisan bill limits premium increases, stops FEMAs ability to increase premiums when a property is sold and provides for some refunds.  This is good news for coastal property owners.  Here is a video discussion of the new law by the National Association of Realtors.  Click “Read More,” then click the link to view:


New Flood Insurance Bill Passes Senate

On March 4 the U. S. Senate passed the Homeowner Flood Insurance Affordability Act with a vote of 72-22.  The bill now goes to President Obama for his signature.  This bill solves many of the issues with the Biggert Waters Act of 2012 which placed undue hardships on many coastal property owners.  Both Florida Senators, Bill Nelson and Marco Rubio voted in favor of the bill.  Here is link that compares the new bill with the previous one.

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More Good News for Flood Insurance

Here is a flood insurance update from John Sebree, Senior Vice President of Public Policy for the Florida REALTORS.

“The US House of Representatives has just passed H.R. 3370, “The Homeowner Flood Insurance Affordability Act.”  This bill is expected to go straight to the Senate (versus go to “conference” with the flood bill the US Senate passed previously).  If it passes the Senate without amendment it will then go to President Obama for his signature.  Attached is NAR’s letter of support and here is a synopsis of what the House bill accomplishes.

Reinstates Grandfathering – This bill permanently repeals Section 207 of the Biggert-Waters Act, meaning that grandfathering is reinstated. All post-FIRM properties built to code at the time of construction will have protection from rate spikes due to new mapping – for example, if you built to +2 Base Flood Elevation, you stay at +2, regardless of new maps. Also importantly, the grandfathering stays with the property, not the policy.

Caps Annual Rate Increases at 15% – This bill decreases FEMA’s authority to raise premiums. The bill prevents FEMA from increasing premiums within a single property class beyond a 15 percent average a year, with an individual cap of eighteen percent a year. Pre Biggert-Waters, the class average cap was 10%. Currently (Post Biggert-Waters), the class average cap is 20%. The bill also requires a 5% minimum annual increase on pre-FIRM primary residence policies that are not at full risk. The updated legislation also states that FEMA shall strive to minimize the number of policies with premium increases that exceed one percent of the total coverage of the policy (e.g., 1% of $250,000 = $2,500).

Refunds policyholders who purchased pre-FIRM homes after Biggert-Waters (7/6/12) and were subsequently charged higher rates.

Permanently Removes the Sales Trigger – This bill removes the policy sales trigger, which allows a purchaser to take advantage of a phase in. The new purchaser is treated the same as the current property owner.

Allows for Annual Surcharges – This legislation applies an annual surcharge of $25 for primary residences and $250 for second homes and businesses, until subsidized policies reach full risk rates. All revenue from these assessments would be placed in the NFIP reserve fund, which was established to ensure funds are available for meeting the expected future obligations of the NFIP.

Funds the Affordability Study and Mandates Completion – This legislation funds the affordability study required by Biggert-Waters and mandates its completion in two years

Includes the Home Improvement Threshold.  This bill returns the “substantial improvement threshold” (i.e. renovations and remodeling) to the historic 50% of a structure’s fair market value level. Under Biggert-Waters, premium increases are triggered when the renovation investments meet 30% of the home’s value.

Additional provisions: This legislation includes several other provisions including preserving the basement exception, allowing for payments to be made in monthly installments, and reimbursing policy holders for successful map appeals.”

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Flood Insurance Bill Passes Senate

Good News!  The U.S. Senate passed a new flood insurance bill on Thursday that will implement a 4-year “timeout” for the recent rate increases to the National Flood Insurance Program.  The bill will now go to Congress where it also has wide bipartisan support.  Click here to read the full article from the National Association of Realtors website.

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Learn about the National Flood Insurance Program

Buyers on St. George Island always ask about flood insurance.  This is a complex issue that is accurately determined with a current elevation certificate for the home.  You should contact your insurance agent or company for the best information.  The National Flood Insurance Program is a part of FEMA. 

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Here is a link to a brochure that lists the Top Ten Facts for Consumers.

You can also go the NFIP’s website for more information  This is the official site of the National Flood Insurance Program.

4-Point Inspections for Beach Houses

Purchasing insurance is an important part of buying a home on St. George Island or anywhere in Franklin County, Florida.  If your home is over 30 years old, your insurance company will require a Four Point Inspection.  This short-form inspection covers electrical system, plumbing system, HVAC systems, including new AC unit installation, and roof.  If you are selling an older home, it may be helpful to have this inspection done prior to listing your home.  If they house fails on any of the four points, this will affect your insurance and financing for the property.   The cost of a 4-Point is currently $125 to $150.  If you are a buyer, your home inspector may be able to do this at the same time for a discounted rate.

Flood Insurance Rates to Increase October 1

The Flood Insurance Reform Act of 2012, passed by Congress, mandates flood insurance rate changes which will be effective October 1, 2013.  It is estimated the average flood insurance premium will increase 10% under the National Flood Insurance Program (NFIP).  The increases will vary by zones with the largest ones in the coastal V and A zones.  Also, the FEMA flood zone maps were recently updated for St. George Island and Franklin County, changing the zones for many properties.  As we approach hurricane season, it’s a great time to contact your insurance agent to review your policies and get more information on the changes scheduled for October.

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