An update to the Biggert Waters Act was revised with the introduction of The Homeowner’s Affordability Act of 2014. Flood insurance rates have now been grandfathered to roll over with the sale of a property rather than have an increase to non federal funded rates. This is a significant benefit for those wanting to sell a property that is below base flood elevation.
Flood insurance rates are factored into the cost of ownership for most buyers. Since super storm Sandy, when the Biggert Waters Act was passed, many feared that flood insurance rates would ten-fold, an example being from $2,500 per year to $25,000 per year. The magnitude of such an increase in insurance costs could have deterred buyers from purchasing low lying properties as well as negatively impact property values on LBI.
It is my understanding that flood insurance companies are able to charge a 25% increase on their premiums annually, until the insurance no longer is subsidized. However, the 25% increase did not appear on most homeowners policies for 2014, although many did have quite an increase in 2013.
