As you may have heard FEMA has been going through many flood insurance changes recently. We’d like to update you on what has been going on and the good news that has come about in the past week regarding these changes.
Up until this past week, the Biggert-Waters Flood Insurance Reform Act of 2012 was making real estate agents and homeowners alike quite nervous. This Act was going to take away a home’s Pre-FIRM or Grandfathered status and require homeowners to pay full-cost flood insurance premiums. Originally, these two types of properties were allowed to pay subsidized rates based on exemptions that Congress had previously passed. These exemptions would be erased and increased rates would be set based on a.) updated flood maps or b.) by sale. If the home was pre-FIRM (homes built prior to 1975) and was re-mapped into a flood zone, it would loose its subsidies and be required to pay the full cost premium. These premiums would be increased by a certain percentage over the next 5 years until the homeowner was paying full cost. If the home was grandfathered and was sold the new homeowner would not be allowed to assume the grandfathered policy and would have to get a new policy based on full cost flood insurance premiums.
Fortunately, Congress passed the Homeowner Insurance Affordability Act on March 14, 2014. This Act will restore the grandfathering of properties that were built to code even if their flood zone may have changed. It reduces the maximum annual increases for most homeowners. The Act also repeals the flood map or sale triggers that would increase rates by updated flood mapping or sale of a home.
Also, on March 7 the release dates were announced for the 2014 Flood Maps and the news is quite encouraging. Preliminary numbers show a decrease by 82% in the number of VE zone structures and a 65% drop in AE zone structures in Dare County.
With this new information regarding the Homeowner Insurance Affordability Act and the updated 2014 Flood Maps we are encouraged about the future of Flood Insurance on Hatteras Island.
To learn more about the Biggert-Waters Flood Insurance Reform Act, click here.