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Flood Insurance Hikes for Florida Homeowners

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Flood Insurance Hikes for Florida Homeowners

Nearly 5.5 million Americans own homes in floodplains and are required to buy federal flood insurance covering up to $250,000 in claims. This figure covers about 40% in Florida including places in and around Naples, Bonita Springs and Estero.  According to a recent article by the Miami Herald, it appears that homeowners may be susceptible to flood insurance premium hikes now up until October 2014.

“Bipartisan group in the House and the Senate and are pushing measures to slow the effects of an overhaul enacted just last year that was aimed at stabilizing and updating the financial in solvent federal flood insurance program. The 2012 law would do little in the short term, however to reduce the programs $24 billion deficit of which $16 billion stemmed from the 2005 ravages of Hurricane Katrina.”

In June, the house passed a measure delaying some of the premium increases as part of a homeland security appropriations bill however that bill stalled in the Senate.

This has affected people who bought or sold a home in the floodplain who are already paying the lower insurance rates. Home buyers are immediately required to pay a premium reflecting the actual flood risk, a change that could raise the insurance costs by thousands of dollars and drive down the selling price by tens of thousands of dollars. Home buyers may not be willing to purchase a home in a designated floodplain if they need thousands of dollars more insurance.

Flood Insurance Hikes for Florida HomeownersOver the last couple of months, the owners of second homes within the Southwest Florida area, commercial property or properties with multiple flood related insurance claims begin paying increases covering 25% of the gap between the artificially low rates and rates reflecting the true risks of buildings in their flood zones.

Starting in October of next year, a portion of the remaining 4.4 million homeowners who live in floodplains, including Florida, may face higher annual premiums over the next five years until their premiums match the true risk of flooding. It appears that nearly 240,000 residents may face these premium hikes along the Gulf Coast, Miami-Dade and Broward County.

Who’s to blame? Many Congress tends to blame FEMA, which oversees flood insurance programs and they are required to conduct and affordability study to assess its impact but several FEMA spokesman says the agency has yet to begin the study. Many of the current flood risks are out of date.

One thing is for certain, homebuyers will be a little more wary as to where their purchasing and families may face more difficulties when it comes to selling.

Read more here: http://miamiherald.com/2013/12/13/3817006/congress-balks-at-finding-a-fix.html#storylink=cpy

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