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Builders, realtors demand reforms to flood insurance program

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Mortgage Professional America | 05 Jul 2016, 06:15 AM Agree 0
Extreme flood insurance rate hikes and shoddy floodplain mapping are driving the cost of homeownership up and home values down, industry organizations told Congress
  • | | 05 Jul 2016, 12:43 PM Agree 0
    Randy Noel needs to get his head in reality. If someone wants to buy a home in a flood plain then they should have to pay the cost of providing flood insurance. Why should the American taxpayer continue to subsidize the NFIP? I don't live in a flood plain yet part of my federal income taxes are used to subsidize those people that CHOOSE to live in a higher risk area. I live in tornado alley and because of the significant increase in storms the past several years my insurance has increased significantly. I live in a higher risk area, yet the American taxpayer isn't subsidizing my insurance coverage.
    Perhaps the changes he wants should be to shift some of my insurance premium burden to the taxpayer!
  • Soonerpepa | | 05 Jul 2016, 12:43 PM Agree 0
    Randy Noel needs to get his head in reality. If someone wants to buy a home in a flood plain then they should have to pay the cost of providing flood insurance. Why should the American taxpayer continue to subsidize the NFIP? I don't live in a flood plain yet part of my federal income taxes are used to subsidize those people that CHOOSE to live in a higher risk area. I live in tornado alley and because of the significant increase in storms the past several years my insurance has increased significantly. I live in a higher risk area, yet the American taxpayer isn't subsidizing my insurance coverage.
    Perhaps the changes he wants should be to shift some of my insurance premium burden to the taxpayer!
  • ARMtgGal | | 05 Jul 2016, 03:37 PM Agree 0
    While I hate this for the homeowner, but the above respondent is correct. The American taxpayers should not be footing the bill for those who choose to live in high risk areas. It's just that, a choice. Choose not to live in a flood plain and save on insurance. I also live in tornado alley and, trust me on this, the governments doesn't help us with our premiums.
    That being said, the flood maps border on ridiculous. We have nearby areas where FEMA did high altitude 'fly overs' and used that to determine the flood plains. Really? You can figure out the elevation from 1000 feet in the air? Oh, and the area is heavily treed too! I'd like to learn that trick. Common sense needs to play a part in this. Of course, we're talking about government bureaucrats, so that is probably not going to happen.
  • MB | | 06 Jul 2016, 05:34 PM Agree 0
    There's much more to this than is readily apparent. I paid a premium for my home 15 years ago to live inside the city in a 60 year old neighborhood which had NEVER flooded. The during Tropical Storm Allison part of the neighborhood did flood because of the drains being blocked by tropical windstorm debris. That was a one time event and I had no loss claim then, and still have a clear history of zero insurance losses since the home was built in 1952. When I bought my home I knew flood insurance was required because we are near a bayou. The annual premium was less than $1000 which I happily paid. I have had no improvements to my home since but my flood insurance is double what my regular homeowners is at $2700 per year (for only 200k in coverage by the way!!) I was told last week by the NFIP after yet another 15% rate hike this year that my premium will continue to rise until I reach my full risk-rated (?) actuarial of - wait for it- $15,900 per year as of 2016.

    On a $200,000 home. That flooded once because of drainage. In 60 years. And has NEVER had a flood insurance claim or payment for flood damage.

    The flood plain maps are absolutely wrecking people financially. Before anyone blames a homeowner for living in a flood plain please keep in mind that many are NOT flood prone homes at all. I'm not being subsidized in any way at all by my fellow Americans; I, like most with required flood insurance, have only paid in and never have filed an insurance claim.
    If I had known that my Flood insurance alone would eventually cost more than my mortgage do you think I would have bought my home? Who will buy it home now if they know that the mortgage payment will be double because of the exorbitant flood insurance premiums?

    Have I lost what most middle-class Americans consider a large part of their retirement nest egg because of the flood maps and the fact that they can charge whatever they want? Sorry but paying nearly $16,000 per year on a 1400sf home that would cost a max of $200k to replace if it were a total and complete -ripped off the foundation- loss is just a ripoff. And if you're house is worth more- oh well. They only insure up to 250k for what will cost ME $20k per year if I increase my coverage. Huh?

  • chris ny | | 21 Jul 2016, 12:49 PM Agree 0
    Just to be clear. They changed the flood plain bounds. Most of these people built well out of the flood plains then FEMA re draws the maps. Now if you have a mortgage you are required to cover. Also, the policy sucks. With a $250,000 max payout. Say what you want, must home owners don't want this stupid policy anymore than the tax payers. And by the way, regardless of what anyone thinks, it can't survive doing this.
  • LD in Jax | | 16 Aug 2016, 02:32 PM Agree 0
    Exactly, chris!!! I bought in 1998 on the Intracoastal and was NOT required to purchase flood insurance. The house was actually built in a Zone X. I purchased anyway, at a rate of $228. Who wouldn't? Now, because I still carry a small mortgage and the powers-that-be have decided that the entire area now be declared a Flood Zone, my rates have skyrocketed yearly to over $3300! Add that to increased property taxes and you can see where people are being run out of their homes. I would gladly forfeit any future claim just to stop throwing my money away, but they won't allow that. My land is worth far more than my little, old house. Of course, 'land' isn't even covered! Such a huge ripoff!
  • Raquel Mullins | | 19 Aug 2016, 08:13 AM Agree 0
    Flood insurance programs are really great till they are affordable and encompasses all the technical aspects related to covering the damage caused to the property and lives by floods.
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