Homeowner's Academy

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Florida Flood Insurance Programs

by BROOKE GOLD HASSON | Mar 18, 2015

flod-insurance-300x225If you haven’t heard by now, flood insurance rates are expected to go up in Florida and in most parts of the country.

Florida has greater subsidized plans from the National Flood Insurance program than in any other state. The National Flood Insurance Program is nearly $25 billion in deficit.

The Biggert-Waters Act was enacted in 2012 to help the federal government move toward eliminating the $25 billion shortfall in flood claims. Its aim is also to make rates truly reflect the risk of building and owning homes in flood plains.

In some cases, rates can increase as much as 25% per year until the ‘true cost’ of the policy is reached. This can eventually be upwards of three times the current amount paid! The biggest effect of the flood insurance rate increase could be felt by those that purchased their home after July 6, 2012. That’s because all purchases after July 2012 of a home built before the Flood Insurance Rate Maps were adopted will be paying the full increase immediately. The 25% per year cap on premium increases does not apply to those pre-FIRM properties purchased after July 2012.

Now, before panic sets in, keep this in mind.  Eighty percent of current National Flood Insurance Policy holders do not currently pay subsidized rates.  For those, rates will remain the same or relatively equal. So, while this new law can potentially impact some  properties, only a small minority will see that 25% increase and an even smaller portion will see the full ‘current rate’ increase. Your chances of experiencing the full effects of this law are very little. However, for those few property owners that will be experiencing the increase this serves as little consolation.

To discuss your flood insurance needs and premiums, call People’s Trust Insurance today at 888-524-6003 and ask to speak about your home’s needs regarding flood insurance.