04/14/2022
FLOOD INSURANCE HAS CHANGED. Kinda.
You might be familiar with the zones: X, AE, sometimes VE. Classically, X was always the good one, and you could bet the flood rate would be around $500 a year. AE was the less good one, and was predictably 2000-2500. VE is extremely rare, reserved only for homes right on the edge of the ocean or sometimes bay, and ive seen those go for $15,000 a year. As they should.
Sometimes a house would be in AE, but if it was raised and you had an "elevation certificate", the insurance company would recognize that the house itself did not have the same risk as if it were flat on the ground in the same spot, and you could get that $2500 policy knocked down to the $500 rate. It was a great tool we could use to make the monthly cost of a home more affordable, and in turn, more valuable.
Well the old way has come and gone, and at the direction of our federal government, insurance premiums are now written specifically for each individual house itself, and based on proximity to the water and claim history, with no regard for elevation or even the map. Its a little bit of a crisis in this waterfront area in which we live. Homes previously paying an X zone rate are seeing a dramatic increase, upwards of 500% (hurting values of entire neighborhoods), while oddly enough some homes in the higher risk AE are seeing a reduction.
But dont panic! The flood map is still accurate, and houses in X zone are still at a very low risk of flooding. The only thing that has changed is how they are charged. As dumb as it sounds, the price of the flood policy is no longer directly related to your risk of flooding.
This is, as it always is, the federal governments way to collect more money, in this case to fund the FEMA program. And with so many homes across the country in an X zone, that zone was an easy target for a cash grab.
Homes in X zones still do not have any requirement to obtain flood insurance by the bank giving you the loan. Only the AE and VE zones do. So you should still refer to the maps during your home search.
When it comes to complicated subjects like this, I always say "I dont need to know, I just need to know the guy who does". That guy is Garrett Duffy who owns Spirit Insurance in Babylon. They've done all my insurance, house cars boats etc, and its the only one I recommend. Give them a call at 631 595 1200!
