Biggert Waters Flood Insurance Reform Act of 2012
Floods and flood insurance used to be considered a southern coastal issue ut looking at natural disaster maps of the US for the past decade you will see that, not only have the number of natural disasters including floods, increased dramatically, but so have the geographic location of floods and other natural disasters; A major hurricane (Sandy) in New York-New Jersey?
Major flooding in New England and Colorado mountains, Taxes plains? An earthquake in DC? In fact many flood issues now occur, not on the coast, but in low lying inland areas.
So what does it mean to you?
FEMA owes Treasury over $25 Billion thanks to losses from Sandy and Katrina that premiums didn’t cover. Moving forward, the National Flood Insurance Program needs to be collecting another $1.5 Billion above the $3.5 Billion currently collected in order to not need federal government subsidies. The Biggert Waters Flood Insurance Reform Act of 2012, passed last year, increases premiums to full risk amount for new purchases and anyone that lets their current policy lapse and bumps up premiums by 20 to 25% for second homes and businesses until they reach full risk amount. Most everyone else will see about 10% annual increases.
According to homeowners and professionals on the front lines, increasing flood insurance premiums, sometimes to unaffordable levels, this quickly and without appropriate notice to homeowners and buyers is pulling the plug on home sales and housing recovery in these communities.
Perhaps one of several reasons that Existing Home Sales number released this morning are down?