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Flood Insurance Changes

Posted By Margaret Hartwig @ May 2nd 2014 11:26am In: Flood Insurance

Flood insurance premiums have risen dramatically for some properties on Folly Beach while others were not affected.  The Biggert-Waters Law was enacted by Congress in June of 2012 to shore up a 25 billion dollar deficit in the National Flood Insurance Program (NFIP).  For some properties, the Biggert-Waters Law changed flood insurance premiums from a few thousand dollars to tens of thousands of dollars at the renewal date of the flood insurance premium.  This put an unexpected and unintended hardship on owners.  Thus, Congress enacted the Flood Insurance Affordability Act this year to soften the impact of the Biggert-Waters Law. 

Below is a pdf from The National Association of Realtors showing the changes in a matrix:

These changes are helping many in the short run but since premiums will continue to increase as much as 25% every year until the fully assessed risk premium is reached, many owners will not be able to afford flood insurance through the NFIP in the long run.  One side effect of the Biggert-Waters Law is that private insurance companies like Lloyds of London are coming back into the market.  It appears from the quotes I am seeing from the private insurance companies that they will be getting a lot more business in the future.

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