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Higher Flood Insurance Premiums

With FEMA changing and updating the flood maps, its best to check the status of your home if your thinking of selling to avoid any surprises.

Besides additional costs for flood insurance going up, the FEMA maps have greatly expanded the area that are consider in a flood plain. On the mortgage side of a real estate transaction, we are constantly running into these surprises.

We were recently doing a mortgage for a client buying a $440,000 house, the client was putting 20% down. When the appraisal was being done the appraiser indicated that the property was partially in a flood zone. Which meant the buyer would need to have flood insurance.

It turns out that the sellers never knew anything about being in a flood zone or that they required flood insurance. As they were not in a flood zone at the time they purchased the property. The transaction almost fell apart, as the buyer wanted a discount on the purchase price as it was not disclosed that the property was now in a flood zone. The sellers finally discount the price by $10,000.

It was clear that the seller was not attempting to misrepresent this issue, as the maps changed since these sellers originally purchased the property.

These flood maps have been greatly expanded, so always ask and verify the information if you have the slightest concern.  

Click on the title for the full article:

Homeowners Facing Higher Flood Insurance Rates

By: Lew Sichelman

"Homeowners will see increases in the rates they pay for flood insurance soon, if they haven't already, with owners of vacation homes seeing the biggest jump. But flood insurance is still one of the best deals going for them."

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Albert Williams January 30, 2013 at 03:50 PM
yep, and my homeowner's insurance jumping 50% proves that!! "Oh there was an overall increase in your area".
Concerned January 30, 2013 at 04:20 PM
When the flood plain maps were updated in Middlefield, it was suggested to the 1st Selectman that he send a notification to those homeowners were noe in a flood plain...he declined to do so. I sould submit that on the selling of these properties, both seller & buyer will be unpleasantly surprised to learn the property is now in the flood plain. It is quite worth it to get a survey done, especially if the home's elevation is above that '100 year flood' mark.
Daniella Ruiz January 30, 2013 at 08:30 PM
don't you just love it when you get un-singled out and thrown in with a whole bunch?? but you can be sure they will nickel and dime you when it comes time to collect from THEM! regulation of this insidious industry is lacking, no, i think it is non existent.
Jon January 30, 2013 at 09:14 PM
Rates are not assessed by the companies at free will . They have to file their rate increases with the Insurance Department who then denies, adjusts or excepts the filing.
Jon January 30, 2013 at 09:16 PM
I love when people complain about how much they pay for insurance but they have no problem paying for a $300 cell phone and pay $100 a month on the bill. They are propbably the same ones that buy the insurance on the cell phone as well.

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