End of FEMA Flood Insurance Subsidies ... (Miami, Sarasota: low income, 2014, mortgage) - Florida (FL) -Miami-Dade County - City-Data Forum

soulsea · 10-21-2013, 05:36 PM

Ok so I've gone back looking at thread titles for the last couple of months and I am shocked that no one is discussing this (apologies if I missed it).

I'm not an insurance broker so I don't know the specific details but I do know this ... we were about to make an offer on an approx. $1m 3800sq/ft home in the South Grove and the flood insurance is $55,000/YR!!!

That's just flood mind you, that's not counting homeowner's and wind, or the $20k/yr in property taxes. Add to that a reasonable amount of maintenance costs and you're at almost $100K/yr to live in $1mil home.

All of this because FEMA subsidies expired as of Oct. 1st 2013. If you're an existing resident they can only go up a certain percentage a year until full price but if it's a new purchase, or a second home, it kicks in immediately. And keep in mind that for the vast majority of home buyers, they can't self insure cause their mortgage company requires them to have flood ins.

Just google news 'Flood Insurance Reform Act of 2012' and many news sources come up on this topic.
For example: http://www.weather.com/news/science/...wners-20130927

This isn't a 'rich people problem' only for folks who can afford expensive homes on or near the water. Flood zones are everywhere in Florida and all over country, inland and on the coast, including many in middle and/or low income neighborhoods who's residents are going to either get insured out of their homes or will never be able to sell their homes to anyone with a mortgage, because flood ins. rates are about to rise as much as 1000%!

All of this is public yet somehow there isn't a homeowner's revolt going on. The federal government can barely agree to spend what they owe already so the likelihood of them reversing this is next to zero. Florida gov. has no appetite to create another Citizens type insurance pool for flood, and private companies don't seem to want to get involved at all, and even if they did there's no guarantee they'd be cheaper than FEMA.

So now what? Dead zones in high risk zones where only the super rich can afford to buy in cash and self insure? Whilst everything in X zones doubles in price as people flee their flood rates?

And this $55k/yr quote I got today ... on a $1m home it is based on the premise that a major flood that will destroy the entire insured value of the home will occur once in 20yrs not 100. So how exactly does that compute?

Every realtor I have spoken to either doesn't want to talk about it too loudly, doesn't want to talk about it at all, or is under the impression that something will be done about it by someone cause it's unthinkable if they don't. Yet here we are, and I expect that as existing homeowners get their new yearly bill, and as closing after closing starts falling through once the flood quote comes in, eventually critical mass will be achieved and something might be done about it.

Am I missing something?

Cubanchic · 10-22-2013, 04:51 AM

Quote:

Originally Posted by soulsea

Ok so I've gone back looking at thread titles for the last couple of months and I am shocked that no one is discussing this (apologies if I missed it).

I'm not an insurance broker so I don't know the specific details but I do know this ... we were about to make an offer on an approx. $1m 3800sq/ft home in the South Grove and the flood insurance is $55,000/YR!!!

That's just flood mind you, that's not counting homeowner's and wind, or the $20k/yr in property taxes. Add to that a reasonable amount of maintenance costs and you're at almost $100K/yr to live in $1mil home.

All of this because FEMA subsidies expired as of Oct. 1st 2013. If you're an existing resident they can only go up a certain percentage a year until full price but if it's a new purchase, or a second home, it kicks in immediately. And keep in mind that for the vast majority of home buyers, they can't self insure cause their mortgage company requires them to have flood ins.

Just google news 'Flood Insurance Reform Act of 2012' and many news sources come up on this topic.
For example: Skyrocketing Flood Insurance Rates Bring Financial Chaos, Heartache to Coastal Homeowners Across U.S. - weather.com

This isn't a 'rich people problem' only for folks who can afford expensive homes on or near the water. Flood zones are everywhere in Florida and all over country, inland and on the coast, including many in middle and/or low income neighborhoods who's residents are going to either get insured out of their homes or will never be able to sell their homes to anyone with a mortgage, because flood ins. rates are about to rise as much as 1000%!

All of this is public yet somehow there isn't a homeowner's revolt going on. The federal government can barely agree to spend what they owe already so the likelihood of them reversing this is next to zero. Florida gov. has no appetite to create another Citizens type insurance pool for flood, and private companies don't seem to want to get involved at all, and even if they did there's no guarantee they'd be cheaper than FEMA.

So now what? Dead zones in high risk zones where only the super rich can afford to buy in cash and self insure? Whilst everything in X zones doubles in price as people flee their flood rates?

And this $55k/yr quote I got today ... on a $1m home it is based on the premise that a major flood that will destroy the entire insured value of the home will occur once in 20yrs not 100. So how exactly does that compute?

Every realtor I have spoken to either doesn't want to talk about it too loudly, doesn't want to talk about it at all, or is under the impression that something will be done about it by someone cause it's unthinkable if they don't. Yet here we are, and I expect that as existing homeowners get their new yearly bill, and as closing after closing starts falling through once the flood quote comes in, eventually critical mass will be achieved and something might be done about it.

Am I missing something?

We knew about this before buying our home, and made sure that we were NOT in a flood zone. The west coast of Florida around Sarasota now has large areas where folks are not able to sell or snow birds are getting the shock of their lives because it is a second home.

Cubanchic · 10-22-2013, 05:22 AM

Just read that article, congress passed that law biggerts waters 406 vs 22. Even when they do something they never think through the consequences. I am sure Maxine Waters thought it would only effect the rich that lived in Malibu with out regard to the newly drawn FEMA maps.

Guarantee a lot of folks will walk away again, who can afford that amount of insurance? Hopefully FEMA doesn't yet again redraw flood zone maps to include 100 year or more floods.

soulsea · 10-22-2013, 11:41 AM

On a side note, I'm happy to post a copy of the quote with the homeowner's name redacted, if it is within forum rules. I don't anyone to think that I am fear-mongering or making this up.

Cubanchic · 10-22-2013, 12:17 PM

You are not, my brother and sister in law live in Miami springs which is no where near the coast and they have a second property that they have a assisted living facility in. The second property doesn't have homeowners and they were use to paying 450 a month for flood, thier insurance went up to three grand for next year and it is expected to increase more the following year.

Where I live is a mixed area where if you are near the canal it is a flood zone, we made sure our property was elevated enough not to require flood insurance.

This problem is just not only here but in and around a lot of areas that are flood zones. We are beginning to hear reactions because of October first and the new escrow bills that mortgage companies hand out in November.

popcorn247 · 10-22-2013, 03:02 PM

Where can I locate maps of the flood zones in eastern south Florida?

soulsea · 10-22-2013, 03:34 PM

Quote:

Originally Posted by popcorn247

Where can I locate maps of the flood zones in eastern south Florida?

Each county has their own maps and formats .... this is the Miami Dade one: Miami-Dade County | Flood Zones

Cubanchic · 10-22-2013, 03:41 PM

What I am sweating a bit is the new maps that are coming in 2014. I can't figure out how the county will make money on this, so a pessimistic view is trying to figure out how can the county benefit money wise and screw us.

soulsea · 10-22-2013, 03:50 PM

Do we know when in 14 the new maps are due to be released to the public?

Cubanchic · 10-22-2013, 04:17 PM

Quote:

Originally Posted by soulsea

Do we know when in 14 the new maps are due to be released to the public?

I can't get a straight answer to this and my area is zoned sort of x (or undetermined) and I check monthly for any updates. I am right on Caribbean in whispering pines cutler bay, one thing I know because of Hubby working for county, is that we are the main pipe line for cutler bay sewage so our area will be one of the first to be up electrically for the lift stations. That being said we have higher elevations because of that and right in front of my house we have two main lines connecting. I doubt seriously that they would deam my property flood zone with these particulars.

I know that at the FEMA site you can check for updates but my area has not been updated yet.

In your situation I would really look at nice areas, not within a flood zone. Do what we did and study the map and the technicals ( helped that hubby knew where all the lift stations and main lines are) figure that into looking into areas that you are looking at. We could have afforded a 350 to 400 k house but chose to depend on only one salary and save the rest for retirement. If I could afford a million dollar house we would still do the same, just because we would love to travel in retirement.

For your budget and no kids, you can build.