I want to buy a house. The problem is that the house is in the flood zone fringe and the flood insurance rates have skyrocketed. Flood insurance that was under $1,000 a year, a very reasonable amount, is now $4,927 a year because the Biggert-Waters Flood Insurance Reform Act of 2012 went into effect on Oct.1.
Anyone purchasing a house after July 2012 has to pay an astronomic price if the house is even in a fringe area. I certainly expected an increase, but $4,000 is ridiculous for an area that has not flooded since 1972. Unfortunately, some flood insurance rates have gone from $2,000 a year to $16,000 a year.
You can say go look at another house; well, I have done that. I have looked at five houses, each one is either in the flood plain or in the fringes so the problem continues.
I have talked to bankers, lawyers, real estate agents, as well as homeowners and people who want to be homeowners and no one knew about the Reform Act.
Your local insurance agent follows the dictates of the National Flood Insurance Program so going to another insurance agency will not solve this problem. Thanks to Jeff Feger at Erie Insurance, I knew an increase was coming, but even I was unprepared for such a huge increase.
Congressman Tom Marino sent the homeowner an email that said the law passed Congress with a vote of "373 to 52." This legislation is to "reflect the true risk of homeowners in a flood plain." For a house that has not flooded since 1972, it is hard to believe the insurance should cost three-quarters of a mortgage payment.
Although I agree and understand the need to raise flood insurance rates, since the National Flood Insurance Program is $28 billion in debt, according to Congressman Marino. I feel so badly for anyone wanting to sell their house because the added cost of flood insurance makes it almost impossible to buy or sell.
With all of the attention on the government being closed and the Affordable Care Act, the Biggert-Waters Flood Insurance Reform Act of 2012 is being ignored. Let's get the word out and ask for a modest increase instead of a ridiculous one. Thank you.