Flood Zone Homework before you buy in Sarasota County (buying a home, buying)

[SnowBird64]

Photoman 6, I quoted One of the many many reasons, not all of them. :-o Probably more than can be counted.


Point is for the buyer. "Do your Homework" before you buy.

[radarboy]

Beach Bum,
I read your post and was wondering a few things.You stated your full flood Insurance bill was $500 for a home built in 1954? Is this a private carrier or Citizens? You also mentioned it being grandfathered in. What would this be grandfathered in from?

[Sunshine Rules]

Originally Posted by radarboy

Beach Bum,
I read your post and was wondering a few things.You stated your full flood Insurance bill was $500 for a home built in 1954? Is this a private carrier or Citizens? You also mentioned it being grandfathered in. What would this be grandfathered in from?

Grandfathering is a National Flood Insurance Program (NFIP) rule that was created in order to recognize property owners who carried a policy before the flood maps became effective or built to the correct standards relative to the flood map in effect at the time of construction. These properties are referred to as Pre-FIRM.

Most flood insurance rates are increasing each year thanks to the 2015 changes to the National Flood Insurance Program as required by the Homeowner Flood Insurance Affordability Act of 2014.

This is from the act:

Flood insurance annual rate increases for primary, owner-occupied residences built before 1978 (i.e., pre-FIRM structures) will increase by no more than 18 percent, plus annual surcharge. These rates, although having an annual cap, may still go up each year until they reach the full-risk rate.

Pre-FIRM vacation, rental, and business properties will continue to go up by 25 percent per year, plus the annual surcharge, until they reach the full-risk rate, the same increase mandated under the 2012 Act.

Pre-FIRM structures substantially damaged or improved – that is, reconstructed at a cost that equals or exceeds 50 percent of the structure’s market value before the improvement – will have an annual rate increase of 25 percent. (This represents a change from the 2012 Act that reclassified all substantially damaged buildings as post-FIRM and immediately required full-risk rates.)

Starting April 1, 2015, an annual surcharge is added to all flood insurance policies: $25 to primary residential structures and $250 to non-primary residential and non-residential structures.

The latest version allows temporary “grandfathered rates” for eligible property owners of structures built in compliance with a prior flood rate map after a new one is published. Under the grandfathering provision, after the first year premium, full-risk rates are to be phased in by a maximum cap of 18 percent per year.


ANYONE looking at purchasing a home in a flood zone should have a serious chat with some local insurance agents about flood insurance rates. Yes, if you pay cash you don't have to carry flood insurance. But if you sell later on the next buyer may be getting a mortgage and flood insurance rates will have an impact.


You can also find info on the flood insurance program at the following websites:

http://www.floodsmart.gov
http://www.fema.gov/business/nfip
current flood insurance rate maps: FEMA Flood Map Service Center | Welcome!
FIRM dates for construction in your area:
http://www.fema.gov/fema/csb.shtm.
Flood Insurance Program Help Center: 1-800-427-4661

[SnowBird64]

Originally Posted by Sunshine Rules

Grandfathering is a National Flood Insurance Program (NFIP) rule that was created in order to recognize property owners who carried a policy before the flood maps became effective or built to the correct standards relative to the flood map in effect at the time of construction. These properties are referred to as Pre-FIRM.

Most flood insurance rates are increasing each year thanks to the 2015 changes to the National Flood Insurance Program as required by the Homeowner Flood Insurance Affordability Act of 2014.

This is from the act:

Flood insurance annual rate increases for primary, owner-occupied residences built before 1978 (i.e., pre-FIRM structures) will increase by no more than 18 percent, plus annual surcharge. These rates, although having an annual cap, may still go up each year until they reach the full-risk rate.

Pre-FIRM vacation, rental, and business properties will continue to go up by 25 percent per year, plus the annual surcharge, until they reach the full-risk rate, the same increase mandated under the 2012 Act.

Pre-FIRM structures substantially damaged or improved – that is, reconstructed at a cost that equals or exceeds 50 percent of the structure’s market value before the improvement – will have an annual rate increase of 25 percent. (This represents a change from the 2012 Act that reclassified all substantially damaged buildings as post-FIRM and immediately required full-risk rates.)

Starting April 1, 2015, an annual surcharge is added to all flood insurance policies: $25 to primary residential structures and $250 to non-primary residential and non-residential structures.

The latest version allows temporary “grandfathered rates” for eligible property owners of structures built in compliance with a prior flood rate map after a new one is published. Under the grandfathering provision, after the first year premium, full-risk rates are to be phased in by a maximum cap of 18 percent per year.


ANYONE looking at purchasing a home in a flood zone should have a serious chat with some local insurance agents about flood insurance rates. Yes, if you pay cash you don't have to carry flood insurance. But if you sell later on the next buyer may be getting a mortgage and flood insurance rates will have an impact.


You can also find info on the flood insurance program at the following websites:

http://www.floodsmart.gov
http://www.fema.gov/business/nfip
current flood insurance rate maps: FEMA Flood Map Service Center | Welcome!
FIRM dates for construction in your area:
http://www.fema.gov/fema/csb.shtm.
Flood Insurance Program Help Center: 1-800-427-4661

Excellent and informative post. Thank You for helping make the potential buyer and or future seller know what they could be getting themselves in to by doing their homework.


Kudos for a great post.


Thank You

[radarboy]

I'm a little confused about your excellent description of the rules. If a previous owner was covered,as the Beach Bum stated, this would continue with the new owner? I've never heard of something like this. I asked him in a earlier post but he must be still at the beach with the dead fish.

[FloridaBeachBum]

Originally Posted by radarboy

I'm a little confused about your excellent description of the rules. If a previous owner was covered,as the Beach Bum stated, this would continue with the new owner? I've never heard of something like this. I asked him in a earlier post but he must be still at the beach with the dead fish.

A primary homeowner who has Grandfathering can let another primary home owner assume his flood policy.

So when I sell my house I give owner copy of my flood policy, tell him to contact my agent and policy transferred to new owners name.

Grandfathering is not just pre-firm it can also be post-firm. For instance lets say you built a house in full compliance with flood regulations. But they raise elevation requirements. You will not be penalized as you built your house in compliance with regulations at time of building.

However a pre-firm building is not risk rated at all. My Split has a basement in an AE8 zone. If build today building codes would not allow and even if did the flood insurance would be sky high.

And the 18% increase is not mandatory, it is up to 18%. I got around 6% at my recent renewal.

[Sunshine Rules]

Originally Posted by FloridaBeachBum

A primary homeowner who has Grandfathering can let another primary home owner assume his flood policy.

So when I sell my house I give owner copy of my flood policy, tell him to contact my agent and policy transferred to new owners name.

Grandfathering is not just pre-firm it can also be post-firm. For instance lets say you built a house in full compliance with flood regulations. But they raise elevation requirements. You will not be penalized as you built your house in compliance with regulations at time of building.

However a pre-firm building is not risk rated at all. My Split has a basement in an AE8 zone. If build today building codes would not allow and even if did the flood insurance would be sky high.

And the 18% increase is not mandatory, it is up to 18%. I got around 6% at my recent renewal.

Increase of no more than 18% and capped at 18% increase is what I posted, but thanks for clearing it up if anyone misunderstood the info.


There is more to grandfathering than just the flood insurance rates.

Another consideration for home buyers is the "50% Rule" regarding pre-FIRM structures in flood-prone areas. Basically the National Flood Insurance Program (NFIP) requires that if the cost of reconstruction, rehabilitation, addition or improvements to a building equals or exceeds 50% of the building's market value, then the building must meet the same construction and elevation requirements as a new building under FEMA guidelines.

Here's the fun part of "market value" -- the city of Sarasota, the county of Sarasota, the city of Venice, the town of Longboat Key, the city of North Port, the county of Manatee, the city of Bradenton, etc all have variations on how the 50% is calculated. If you plan to renovate an older home that may fall under the 50% Rule, talk to the appropriate building department to see what is applicable to your home.

Be wary of investor fix and flip remodeling that may not have had appropriate permits pulled to avoid the 50% threshold rule as project costs calculated into the 50% could include things such as built-in appliances, flooring, interior finishes, and other finishing materials in addition to structural related materials and costs.


The more info you have, the better choices you can make.

[radarboy]

Thank You both for making this a lot clearer. Does the Grandfathering apply to both Private ins. and Citizens Ins?

[FloridaBeachBum]

Originally Posted by radarboy

Thank You both for making this a lot clearer. Does the Grandfathering apply to both Private ins. and Citizens Ins?

i doubt it.

[FloridaBeachBum]

Originally Posted by Sunshine Rules

Increase of no more than 18% and capped at 18% increase is what I posted, but thanks for clearing it up if anyone misunderstood the info.


There is more to grandfathering than just the flood insurance rates.

Another consideration for home buyers is the "50% Rule" regarding pre-FIRM structures in flood-prone areas. Basically the National Flood Insurance Program (NFIP) requires that if the cost of reconstruction, rehabilitation, addition or improvements to a building equals or exceeds 50% of the building's market value, then the building must meet the same construction and elevation requirements as a new building under FEMA guidelines.

Here's the fun part of "market value" -- the city of Sarasota, the county of Sarasota, the city of Venice, the town of Longboat Key, the city of North Port, the county of Manatee, the city of Bradenton, etc all have variations on how the 50% is calculated. If you plan to renovate an older home that may fall under the 50% Rule, talk to the appropriate building department to see what is applicable to your home.

Be wary of investor fix and flip remodeling that may not have had appropriate permits pulled to avoid the 50% threshold rule as project costs calculated into the 50% could include things such as built-in appliances, flooring, interior finishes, and other finishing materials in addition to structural related materials and costs.


The more info you have, the better choices you can make.

I tried to do an extension on my house. They claimed I had prior work no permits that needed to be processed.

So I have to process the prior unpermitted repairs, then wait two years and re-submit extension. If doe at same time would push me over 50% threshold.

Folks have built mcmansions out of shacks and kept grandfathering you just do it in stages.