Non-primary residences are going to be seeing an increase in their premiums for protection against flooding.
Although owners of primary residences have been breathing a sigh of relief over recent flood insurance news, the story for owners of rental properties and vacation homes will soon be quite different.
The reform bill that passed in Congress in March is working to assist homeowners, but not non-primary residence owners.
The owners of non-primary residences could be in for somewhat of a shock, this spring, when they receive their flood insurance policy renewals in the mail. When it comes to older primary homes in flooding prone areas, there will be an expected average increase of 15 percent on these policies, but non-primary residences will see a much higher overall hike. In fact, a memo from the Federal Emergency Management Agency (FEMA) has indicated that the average increase for non-primary residence owners, overall, will likely be closer to 37 percent.
Second homes won’t see any relief in their flood insurance premiums from the passing of the bill last March.
The Flood Insurance Affordability Act has eased the strain quite a bit for primary homeowners, but second homes – such as vacation homes – are expected to see an increase of about 24 percent in 2015 for the federal coverage. There will be an additional annual surcharge of $250, as well, which is applicable to all forms of homes that are not considered to be primary residences.
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What this means is that a policy that would usually be $2,000 per year, will rise to about $2,730, with annual increases to follow, that could be as high as 25 percent over each of the next few years.
The first wave of changes could affect about 6,800 older properties that are located in high risk flooding zones within Hillsborough and Pinellas counties. Moreover, there are also over 1,900 business properties that will likely be seeing similar changes to their own rates in 2015, though FEMA has not yet made that announcement.
Therefore, while it may be vacation homes at the start, the increase in flood insurance premiums will also be extending to rental properties such as apartments and two- to four-unit family properties within the affected areas.