Flood Insurance – Changes To Be Aware Of
The National Flood Insurance Program has changed their program in an attempt to try to charge premiums that they feel will more accurately reflect the flooding risk of the property. FEMA is currently over 30 billion dollars in debt which may be the major cause of the changes. The changes will have a huge impact on any homes that are on the market and needing flood insurance.
Prior to October 2013 there were two main rating plans.
Pre Firm – here in Fort Wayne, homes built before 1985
Prior to October, these homes could easily be rated by an agent in order to give you an estimate of what your buyer could expect the flood insurance to cost. This was the plan most Fort Wayne homes fell into.
No elevation certificate was required.
Post Firm – homes built after 1985 here in Fort Wayne
These homes have always needed an elevation certificate as the program felt homes built in the flood zone after flooding zones were established need to be elevated or pay a much higher rate/ a home could be rated at the highest rates if no elevation certificate was available.
With the flood insurance program changes, a home buyer can no longer get any type of a flood insurance estimate without an elevation certificate ON ANY PROPERTY… no matter what year the home was built! Even with the elevation certificate, agents are sometimes being told by the rating sites that they need to submit the quote for rating. As an agent you will not be able to provide an estimate on what the existing homeowner pays as those rates are no longer available. Many rates are more than doubling. Even people who are not selling their homes will eventually need to get an elevation certificate as many existing policies are simply not renewing without the certificates or seeing a large premium increases until the elevation certificate is provided.
Homes in flood zones will become more and more difficult to sell or purchase as the cost of flood insurance rises.
Clients attempting to sell their home that is in a flood zone will most likely need to get an elevation certificate to provide to interested buyers so that an accurate flood insurance estimate can be obtained.
On the insurance agents side of things, the quoting process as well the application process has gotten much more complicated and difficult. Working with FEMA has never been easy but with this change, many insurance agents have decided that they will no longer take part in the National Flood Insurance Program or write any type of flood insurance.