In early April, FEMA directed insurers that write flood insurance on their behalf to charge rates that were in effect before October 2013, for certain categories affected by the Biggert-Waters Reform Act of 2012 which went into effect on May 1, 2014. This is an interim step to bring relief to homeowners and buyers.
President Obama signed H.R. 3370, solidifying at least short-term relief for homeowners hit by skyrocketing flood insurance rates and sellers afraid their homes will be worth less after buyers factor in the yearly cost of significantly higher flood insurance.
Before President Obama signed the new law, the amount of money paid for flood insurance coverage would readjust at the time of sale for homes built before the creation of flood insurance rate maps (pre FIRM). As a result, a buyer might be forced to pay thousands of dollars more for flood coverage, which directly impacted the value of the home.
Under the just-passed bill, the purchaser is treated the same as the current homeowner. Under rules in the new law, flood insurance rates may still go up for a buyer but they won’t rise any more than they would have if the current owner retained the property.
Additionally, revised flood insurance maps for South Florida are complete and will go into effect August 1, 2014. After a three-year study of Broward’s flood zones, FEMA is removing 265,781 Broward parcels from the flood plains, according to county estimates.
View the new Broward County FEMA Flood Maps to determine if your home has been reclassified. Not all homeowner’s will be affected, and your lender may still require flood insurance even if you are outside a flood zone.