What You Need to Know About the Flood Insurance Reform Act of 2012
With so many storms making a name for themselves in the recent past, it’s become necessary for the federal government’s flood insurance policies to make some changes. For this reason, if you’re buying or selling a house, you’re going to want to know what these changes are. Basically, flood insurance provides subsidies for properties in areas that may be especially prone to flooding and therefore hard to insure.
The Flood Insurance Reform Act of 2012, otherwise known as FIRM, has some lasting provisions that change the game a bit.
For owners: If you already currently have a home on a flood plain AND have federally subsidized insurance, you MAY KEEP that insurance until if and when you sell. This is great news for you! However, the marketability and value of your home may be affected in the future.
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For buyers: when you go to buy a property from a seller that has a home on a flood plain and federally subsidized insurance, YOU WILL NOT be able to acquire insurance at the federally-insured rate. BUMMER! As a buyer of a property in a flood plain, you will now have to look to the open market. Yes, this does mean you’re probably looking at a much higher price. Additionally, if you want to obtain a mortgage on a home that is even partly located on a flood plain, you will HAVE TO acquire flood insurance. It’s required if ANY PART of the property is located on a flood plain. It should also be noted that it is THE BUYER’S RESPONSIBILITY to know if ANY part of the property is on a flood plain and to obtain proper insurance accordingly.
As you may have guessed, these changes have caused flood insurance premiums to rise everywhere. Not only that but if you’re looking at extremely high-risk areas such as coastal areas that are prone to hurricanes and such, premiums can be astronomical. Flood Smart is a great way for someone to stay informed and keep AFLOAT of the situation and DROWN in any consequences.
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Have more questions? Feel free to give us a call at any time. Because we know the Sunset Beach and Intracoastal waterways, we can help you buy the right home and prepare for the future.