Flood Insurance Hike A ?Shore' Thing | Mortgage Rates & Trends

Flood Insurance Hike A ?Shore? Thing by Steve Viuker

A recent article in The N Y Times highlighted the continuing issues confronting Sandy-affected homeowners in coastal communities.? The Times reported that FEMA is updating flood hazard maps

Photo courtesy of Walter Homes

to ?assess present-day risks, but until the redrawn maps are finalized, and the rates revised, neither homeowners nor mortgage lenders can accurately estimate the affordability of future premiums.? And that ?FEMA is also phasing out the subsidized rates granted to policyholders with homes built before local flood maps were first drawn.?? (20 percent of the 5.5 million policyholders receive these subsidies.

Explained Joseph DelDuca, Partner and General Counsel, of Walters Homes, ?There is a period of uncertainty here. On the homeowners side, you hope the certainties and the facts are not too painful. If you?re on the buying and selling end of real estate, you also need certainty. The market will adjust based on those certainties.? People can make decisions regarding how much it?s going to cost if? they leave their house intact; or if they raise it. And determine what the house is worth; based on these issues. And there will be a devaluation of houses that have higher flood insurance premiums. This also impacts the communities. As the values go down, so do the taxes.? Subsidized flood insurance was making everyone fat, dumb and happy until we had a disaster . If you own a house on the Shore, you know you have risk and you?ve always known it. ?

DelDuca? has two homes on the Shore area in the ?v? zone and the value might drop by 30%. But he also believes homes can be built? in an ?a? or ?v? zone that will withstand flood waters. ?The homes that were built according to code were not damaged after Sandy. My two homes suffered damage but were limited to replacing doors and appliances and the like,? said DelDuca.

It will take a number of years to resolve the issues. ?The towns along the coast are going to fight the zone designations,? he said.? ?But FEMA has eased up, at least in Ocean County. The rules governing the zones are more workable. But most coastal areas will be an ?a? zone; right on the beach will be ?v? zone.?

V Zones

According to FEMA and the National Flood Insurance Program, any building located in an A or V zone is considered to be in a Special Flood Hazard Area, and is lower than the Base Flood Elevation. V zones are the most hazardous of the Special Flood Hazard Areas. V zones generally include the first row of beachfront properties. The hazards in these areas are increased because of wave velocity ? hence the V designation. Flood insurance is mandatory in V zone areas.

A Zones

A zones ? the next most volatile of the Special Flood Hazard Areas ? are subject to rising waters and are usually near a lake, river, stream or other body of water. Flood insurance is mandatory in all A zones because of the high potential of flooding. A-zone maps also include AE, AH, AO, AR and A99 designations, all having the same rates. The different A zones are named depending on the way in which they might be flooded. (source: http://www.flash.org/about.php)

for the complete FEMA changes:

http://www.region2coastal.com/sandy/table

for info on sustainable residences:

http://www.waltershomes.com/PublicPages/Residential-Rebuild.aspx

Source: http://www.totalmortgage.com/blog/general/flood-insurance-hike-a-shore-thing/21925

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