Home owners and buyers in the St. Petersburg and Tampa Bay real estate market, beware of rising flood insurance rates.
You may have notice an increase in your flood policy premiums as of January 1st 2013, well this is only the beginning. The Biggert-Waters Flood Insurance Reform Act of 2012 becomes effective October 1st, 2013.
Let’s begin with a little background. FEMA, the Federal Emergency Management Agency, oversees the National Flood Insurance Program, (NFIP). FEMA rates the flood hazard risk for the entire United States. This flood hazard risk rating system helps to determine flood plain maps, which in turn associates varying costs of coverage for flood insurance across the US. FEMA also helps manage disaster preparedness through the Nations First Responders, for other disasters such as earthquakes, fires, tornadoes, hurricanes and winter storms. The cost of disaster relief is spread across the country to all users / purchasers of insurance policies.
The Biggert-Waters Flood Insurance Reform Act states that there will be a 10% average rate increase in premium cost for all flood insurance policies written or renewed after October 1st, 2013. Costs will vary by specific flood zones. There will be a 25% rate increase for non-primary residences such as second homes and investment properties. For Condominium communities there will be a 10% to 20% increase for the Master Condo Policy.
Things to keep in mind:
When you order a survey, ask for an Elevation Certificate. The Elevation Certificate is a must if you are on a flood plain. The certificate will show the base level of the improvements on the property and help to specifically determine the premium cost of flood insurance coverage. The elevation certificate stays with the property and is transferable to the next owner.
Flood insurance policies are “Assumable”.
When you are purchasing a home in the St. Petersburg, Tampa Bay area, ask if there is a current flood policy on the home. By assuming this policy you will most likely assume a lower premium cost.
Finally, there is typically a 30 day wait period on coverage start for flood policies. If you are purchase with a new mortgage the waiting period is waived, coverage starts at closing.