A change to the flood insurance rating is set to take effect April 1, 2016 that could affect your ability to sell your house. Another twist to this problem is because of the 30 day waiting period for flood policy to take effect you need to take action by March 2nd to take advantage of lower premiums.
Here is the information as provided by our company. If you are not familiar with flood insurance it may be a little confusing but you can call us for clarification.
|NEWLY MAPPED RATING RULE CHANGE|
|Less expensive Newly Mapped flood policy rating has been available to any property rezoned from a flood zone B, C, D or X to an A or V zone by an updated Flood Insurance Rate Map (FIRM) released October 1, 2008 or after, regardless of how much time has elapsed between the rezoning and the purchase of coverage. Effective April 1, 2015 the above properties were given until April 1, 2016 to apply for a Newly Mapped rated policy. Property owners in an area rezoned April 1, 2015 and after only have one year to obtain the less expensive Newly Mapped rating.|
|WHO DOES THIS AFFECT?|
|•||Owners of properties remapped into the floodplain since 10/1/2008 who have not purchased flood coverage|
|•||Especially owners of pre-FIRM (older) remapped properties|
|•||Anyone who might refinance a remapped property after 4/1/2016|
|•||Anyone who might sell a remapped property after 4/1/2016|
|HOW DOES IT AFFECT THEM?|
|•||They forever lose their eligibility for less expensive, Newly Mapped rating|
|•||Will be required to pay significantly higher premiums if coverage is desired or required in the future|
|•||May face a greater challenge selling their property|
|•||If they take advantage of Newly Mapped rating now, they will continue to benefit from it for many years|
|Let’s look at a simple rating example to demonstrate the potential benefit of Newly Mapped rating.|
|A single family, primary residence was rezoned from a flood zone X to a zone AE by a FIRM released June 15, 2012. This property will qualify for Newly Mapped Rating through and including March 31, 2016. The Newly Mapped premium for $200,000 of building and $80,000 of contents coverage is $444 (assuming a slab foundation) – if the policy takes effect prior to April 1, 2016.|
|From April 1, 2016 on, it will no longer qualify for Newly Mapped rating, and the policy will be rated with zone AE rates. If the home qualifies for pre-FIRM rating, that same policy would cost $3,321!|
|Would potential future buyers of this property rather assume a $444 Newly Mapped rated policy, or face paying that $3,321 pre-FIRM premium? How many buyers would be scared off by the pre-FIRM premium?|
People living in the following counties have had properties remapped recently Macomb, Monroe, Oakland, Washtenaw, Wayne and many more. Even if you don’t have a mortgage and a bank requiring you to have coverage you may want to consider a policy since the policy is transferable to a new owner.
More information about flood map changes is available here.
Call us today and we can help with your options. 734-379-9611