New home purchases have been kicked down due to the suddenly higher premiums connected with coverage.
Now that the flood insurance zoning maps have been changed by FEMA, even new home buyers who went to the effort to do their due diligence are finding that they are ending up with a losing deal.
The risk zones have been changed and this is leading new home purchasers to face far higher expenses than expected.
Individuals who have consulted the correct resources and who have found the designation of their homes according to the floodsmart.gov website from FEMA, as well as the National Flood Insurance Program’s preferred risk policy are now discovering that where they may have been in moderate flood hazard zones when they purchased the property, only a few weeks later, they are suddenly discovering that they now live in high risk zones.
Many of these individuals thought that as long as their homes were built years ago, their flood insurance rates would be grandfathered.
Unfortunately, the preferred risk policy and rate were not carried over when their zones were remapped, causing their flood insurance expenses to skyrocket only a very short time after they have moved into their homes. Some of these homeowners discovered the news from sources such as flyers that were being distributed by local organizations and associations. Suddenly, when these new home buyers checked into their statuses on the maps, they were at a higher flooding risk.
This was the case among many people who discovered the Biggert-Waters Act within their local newspapers. This was a law that passed in 2012 in order to bring the rates for flood insurance to a point that they align more accurately with the actual calculated risk. For most people, this meant an increase, as they had historically received subsidies from the federal government for this coverage. This was no small increase. Premiums that had previously been well under $400 per year were sent to levels beyond $5,500 for that same length of time.
Beyond causing a great deal more expense for the new homeowners, the flood insurance zoning has also annihilated the resale value of their homes. It is expected that this will have a tremendous impact on the real estate market within these regions.