New regulations increasing flood insurance rates
Thu, 24 Oct 2013 23:57:42 GMT —
A law passed by the federal government last year could increase your flood insurance rates ten-fold.
The Biggert-Waters National Flood Insurance Program Reform Act passed last year in an attempt to make the Flood Insurance Program viable. For years the program has been subsidized by the government, but with massive pay-outs after Hurricane Katrina and Superstorm Sandy, FEMA has been struggling.
"Unfortunately, what has happened is it's in such a bad position that Congress decided that it was time to make it a viable program," said Laura Crowther, CEO of the Coastal Carolina Association of Realtors.
The new laws hit Lee Hewitt and Garden City Realty when they started trying to sell a home in Murrells Inlet. "The flood insurance quote went from being $1,300 a year to $16,000 a year," Hewitt said.
Even though the home is built above the flood zone, the pylons don't meet the new code.
Hewitt says the home has been on the market for about six months, and they were close to a deal, but the flood insurance premiums have them back at the drawing board.
"Anytime you have a buyer who's anticipating a flood insurance premium of $1,300, and you call them and say its going to be $16,000, yeah, it's delayed it. We're two weeks past the original closing date," Hewitt said. "The buyers are in shock, the sellers are in shock, because they certainly did not see that coming."
The rate hikes aren't limited to those along the coast. Crowther says even those inland could be affected. "If you are close to any kind of tributary, and are in a flood zone, these changes will potentially affect you."
The state of Mississippi has already filed a lawsuit against FEMA. Some realtors are encouraging South Carolina to do so as well. Crowther told us she just wants the government to pause the new program, so they can work together to develop a better solution.
To find out if your rates will be affected, you should call your insurance agent.