Flood Insurance: Should You Be Worried About Premium Increases?

Hear that whoosh? It's the sound of homeowners in flood-prone areas around the United States sighing in relief, albeit cautiously.  In late October, Congress drafted legislation calling for a four-year delay of the Biggert-Waters Act, which would have significantly raised flood-insurance premiums.

The act was initially passed last year by lawmakers who called for higher rates - and for more homeowners to be required to buy flood insurance - to keep FEMA fiscally sound and ready for future disasters.

Over time, however, the economics of the law worried many homeowners, lawmakers and real estate professionals.  The proposed rate hikes could cost up to $20,000 per year...No, that's not a typo - TWENTY THOUSAND DOLLARS PER YEAR...even on modestly priced homes, according to the Tampa Bay Times  Industry observers worried that the Biggert-Waters Act would price many owners out of their homes, affect currently listed homes for sale, and slow the housing recovery.

Several days ago, after some discussion, and official statements from the National Association of Realtors, some of the very lawmakers who sponsored the Biggert-Waters legislation now agree to make sense to postpone the premium increases for four years.  In addition, they want FEMA to conduct an affordability study before the premiums go up.

Because the proposal to delay the Biggert-Waters Act has bipartisan support, it's expected to be passed relatively quickly.  And that's even more reason to be relieved.

If you own a home and believe you may be affected by premium increases, or are considering purchasing a home, it is important to consult with a knowledgeable agent before making a move.  If you're buying a home with a quaint babbling brook in the back yard, you should be aware that this could make an impact on your homeownership expenses in the years to come.  How do you know if your home is in a flood zone? Click HERE to be redirected to the government website that calculates the flood risk.

No matter where you are in the country, we are able to help you with your real estate needs or refer you to a very well qualified, knowledgeable agent who will help you in your area.  Click Here to let us know how we can help you.

This article is brought to you, in part, by RE/MAX