Flood Insurance Reform

Bonita Springs Ryan HomesThe Biggert-Waters Flood Insurance Reform Act of 2012 is a law passed by Congress and signed by the President in 2012 that extends the National Flood Insurance Program (NFIP) for five years, while requiring significant program reform. With over 24 billion in debt, the national flood insurance program has been heavily subsidized by taxpayers. Biggert-Waters imposed 25 percent rate hikes on some, but not all properties that have received premium subsidies through the National Flood Insurance Program. The FEMA program has traditionally charged premiums at about 40-45 percent of their full cost, with the balance paid (subsidizing the rest) by the taxpayers. Additionally, there is some states that pay significantly more in premiums more than they pay to cover damages. For example, Floridians paid $3.60 in flood premiums for every $1 that came back to cover damages. On the other hand, Mississippi receives $5.00 in claims for every $1.00 paid in premiums.

On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law. This law repeals and modifies certain provisions of the Biggert-Waters Flood Insurance Reform Act of 2012. This reform caps the annual premium increases at 18 percent. In addition to capping annual increases at 18 percent, the bill allows people buying homes covered under the federal flood insurance program to pay the subsidized premium rate at first, rather than the higher rate reflecting true flooding risk.

Most people do not realize that the flood insurance program is subsidized. This makes me wonder why we have been subsidizing flood insurance coverage for homeowners who build or buy in high-risk areas anyway.  I can understand that the dramatic change in flood insurance can have a drastic affect on the home owners and probably home values.  Thus, I agree with a gradual increase in flood insurance premiums.

If you are interested in buying a new home or an existing home, please contact me (Alan Lane with Keller Williams Realty at 2119 W Brandon Blvd, Brandon, Florida  33511) and I can help you find a new home in the Tampa Bay Area.  The Keller Williams offices of  ”Suburban Tampa” include the offices in Brandon, Plant City, Fishhawk Ranch, and our newest office in Valrico.  My email address is alanlane66@gmail.com, or call me at 813.205.9280.  If you are just starting your search, you can search the MLS for homes on my website at this link.

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