Latter and Blum Realtor Regina Allemand said that so far the new flood rate changes have had minimal effects on the local housing market.
“However, this will not continue to be the case,” he warned.
The new National Flood Insurance Program program, known as Risk Rating 2.0, went into effect on October 1, 2021, meaning that new policies on or after October 1 were subject to the new rating methodology. All pre-existing policies that renew on or after April 1, 2022 are subject to the new program.
Flood insurance policies will increase 18% per year, the maximum allowed by federal law, under Risk Rating 2.0 until the policy peaks, the peak of which is not yet clear. Flood zones are a thing of the past now, with policy premiums calculated using a vague set of criteria including distance to water, seemingly independent of a levee system.
Several local homebuyers and homebuilders have reported new policy rates of up to $6,000 a year.
“Homeowners are strongly encouraged to have a discussion with their insurance agents to discuss current and future coverage,” Allemand said. “If you currently have a flood policy, it’s important not to let it lapse. This could make or break a sale when you or your heirs go to sell the property. Since October 2021, this has been the case with new sales. If the current sellers had a valid policy, it could be assumed at the current rate. It is important that these new buyers understand that they too are subject to increased premiums.”