Important Information about Flood Insurance Survey Rates

June 24, 2013

Over 50,000 Florida flood insurance policies will increase this year as the National Flood Insurance Program (NFIP) moves to make more policies actuarially sound. Three categories of ownership will increase in 2013: businesses, homes and condos that aren’t a primary residence, and new homebuyers.

Some homeowners – about 19 percent nationally – currently pay a rate that does not accurately reflect their property’s actual flood risk, with the difference subsidized by taxpayers. The new legislation requires the NFIP to raise rates to reflect that true flood risk, or be actuarially sound, and phase out taxpayer subsidies. One of the goals of the Act is to make the national flood program financially stable.

In areas of Florida with a heavy concentration of subsidized properties, the change could make a difference in home sales going forward.

However, the homes affected by higher flood insurance rates and the amount of any increase vary from neighborhood to neighborhood. Many home sales won’t be affected at all.

While all subsidized flood insurance policies will eventually rise to actuarially sound rates, NAR hopes to slow down the timing of incremental increases. To make a case to Congress and the Administration that the current schedule presents an undue burden to affected homeowners, however, the National Association of Realtors® (NAR) needs facts. It’s asking any member who has been impacted by the flood insurance increase to take a survey explaining – in as much detail as possible – how the flood insurance increase affected them or their clients.

 

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