Flood Insurance Changes effective 10/1/13

As a result of lots of bad weather causing lots of damage and insurance claims the Federal Government and the Insurance Industry are making dramatic changes to the way policies are rated and the premiums associated with insuring for flood damage.

Many of us over the years have been dealing with this subject as insurers decided to leave our market, no longer renew in areas where they thought their exposure was too great.

I remember getting that letter from my Moms insurance carrier of over 30 years. A reputable company who had benefited from 30 years of no claims just decided to not renew and for a short period of time finding a replacement was not easy. Our new carrier was happy for the business, but the rates were not the same....they were much higher.

Today's comprehensive changes are to establish a rate structure that is no longer subsidized or cost averaged. Individuals who have homes in flood prone areas will pay higher rates than those not as exposed.

For some that will be good news, their houses are better located, for others this may be an expensive surprise requiring consideration of raising foundations or other pre-emptive moves to lessen the possibility of flood damage.

I spoke with Gene Walker of McMann Price Agency in Greenport to see what he had to say, the net of the conversation was “how is your property classified, in a zone FEMA has determined higher risk, flooding possible within a 100 year period, or lower risk, flooding possible within a 500 year period, these will dictate pricing for insurance”.

I also received good input from Chip Puccio of Neefus-Stype Agency in Aquebogue; he was kind enough to forward a Web Site for me to understand the new regulations better which I will share with you here. http://www.fema.gov/flood-insurance-reform-act-2012. It’s complicated stuff so I recommend talking to the experts to ensure you understand and do what is necessary to protect your most important and expensive asset, your home.

Whether you are a buyer or seller, knowing the facts about insurance and your house or a house you are interested in purchasing is now one of the many check list items you and your real estate agent need to be concerned with.

If you would like to discuss the above or need help selling or buying real estate, let me know. I can be contacted at either of the below destinations.

eMail:   egiordano@elliman.com

Tel:         631 298 6131

For those of you so inclined you can also access my Web Site, www.elliman.com/egiordano, where the “In the News” tab will have lots of helpful information for both sellers and buyers.