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 Sarah's Blog 
Monday, May 27 2013

Flood Insurance and Your Home 

 

I just read an important article about changes coming to our island flood insurance programs. Written by the owner of Heidrick & Company Insurance and Risk Management Services, Chris Heidrick, he discussed many issues we need to know. Especially for older, ground level homes.

According to the article, "The most significant section of the act immediately eliminates rate subsidies on structures built prior to 1979 on Sanibel, and 1984 on Captiva, Fort Myers Beach and many parts of mainland Lee County. Rates for these structures have been artificially low since the inception of the NFIP in 1968. Premiums for these policies will increase from a range of $1,200 to $2,400 to at least $3,000 and in many cases to well over $10,000 per year. While the new rates have not yet been released, indications are available. Government and industry leaders all agree on the enormity of the increases."

 

 

 

This is news that all owners on Sanibel and Captiva need to be aware of. Mr. Heidrick continues, "Increases (will be) phased in over the next several years through annual increases of 20 to 25 percent per year. However, policies that were purchased on or after July 6, 2012 will require owners to obtain an Elevation Certificate and will be re-rated at the new, higher rate at the first renewal after Oct.1, 2013."

Our islands are in the flood plain that will definitely affect our future rates and availability. This is sure to have an impact on our real estate market.

Probably the best thing we can do is to contact our insurance representative and see how this will impact our individual properties.

To continue, "Any building that has been 'substantially improved greater than 30 percent of its fair market value' will immediately be subject to the new, higher rates. This threshold is lower than the "50 percent of fair market value" threshold that triggers conformance requirements under FEMA construction guidelines. However, if the improvement elevates the building above Base Flood Elevation it could result in a decrease in flood insurance premiums.

"Further, the practice of "grandfathering" will be phased out beginning in late 2014. Grandfathering allows a property owner to continue to pay lower rates after a revision to flood maps indicate an increased hazard for that property, saving some property owners thousands of dollars."

 

The article concludes, "For owners of properties impacted... there is one glimmer of hope that has recently surfaced. On May 7, 2013, Sen. Mary Landreiu of Louisiana introduced an Amendment to the Water Resources Development Act (WRDA) that would stop premium rate increases for NFIP coverage until FEMA conducts an affordability study and there is adequate time to act on the findings. Homeowners and citizens should contact Sen. Bill Nelson and Sen. Marco Rubio to express their concerns about Biggert-Waters (Flood Insurance Reform Act of 2012 ) and ask for support of Sen. Landreiu's Amendment to the Water Resources Development Act."

 

 

I think the bottom line is that we need to pay attention to the changes coming down the road. Our low lying islands are vulnerable to hurricanes and subsequent flooding, and we need to keep our flood insurance availability. It's key to our real estate market and our well being.

I'll be keeping a close watch on when and how these changes are implemented, so please contact me for more information. I'm a long-time island resident too, and this new policy will affect us all.

You can read the entire article Here

Sarah Ashton, Broker Associate
Royal Shell Real Estate
239-691-4915

sarah@SarahAshton.com

Posted by: AT 10:35 am   |  Permalink   |  Email


Servicing the Real Estate Needs of Buyers and Sellers on Sanibel and Captiva Islands.

 
ReMax of the Islands Sarah Ashton
Sarah Ashton Sarah S. Ashton, Broker Associate, Realtor®
ReMax of the Islands
2400 Palm Ridge Road
Sanibel, FL 33957

 

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