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A multi-million dollar property on the oceans edge one foot above sea level, I wouldn't expect any insurance company wanting to take on that policy at any price. That is why the NFIP is insolvent, it is expensive but it doesn't cover the loss. They aren't required to get flood insurance if they own the home, that's their choice.
$250,000 is the max property insured amount for flood insurance for a house. A $4 million home could only get a max of $250,000 in flood insurance. A $400,000 home could only get a max of $250,000 in flood insurance.
I have heard of these beachfront properties in hurricane prone areas get cheap federally subsidized insurance using the excuse they want to preserve the small towns near the coast. These homes cost 1+ million $ taxpayers are subsidizing insurance for wealthy people.
This is true. I remember years ago a friend giving us a tour of beach homes in South Carolina. He pointed out all the new beachfront homes, being rebuilt over and over courtesy of the taxpayers. This is long overdue.
A multi-million dollar property on the oceans edge one foot above sea level, I wouldn't expect any insurance company wanting to take on that policy at any price. That is why the NFIP is insolvent, it is expensive but it doesn't cover the loss. They aren't required to get flood insurance if they own the home, that's their choice.
They're not one foot above sea level here; they're about 14 ft above. And how can FEMA flood insurance be insolvent when they pay out only 10 times the annual premium that's been paid for 40 years (at least that's what happens around here)? Seems much more like government mismanagement to me. The premiums charged DON'T match the risk involved. A 40 year old home with one claim paying premiums for 40 years gets a minimal payout but that home in the article gets flooded 22 times and doesn't have a much higher premium? Guess what's wrong with that?
Premiums SHOULD be based on flood zone location AND claim history, not just flood zone location. Homes with a lot of claims should have MUCH higher premiums.
This is true. I remember years ago a friend giving us a tour of beach homes in South Carolina. He pointed out all the new beachfront homes, being rebuilt over and over courtesy of the taxpayers. This is long overdue.
Good luck rebuilding with that $70,000 FEMA payout. Even at the max $250,000, it would be extremely difficult to build a new home that meets current FEMA building codes without getting a huge mortgage to supplement the paltry FEMA payout.
I’m in favor of flood insurance paying for homes that wash away because they had no business being built in the first place. Of course it will be expensive. Everyone’s tax dollars shouldn’t be spent over and over again.
What is unfair to me, is that my house did not require flood insurance when I bought it, but now, since one corner of a detached garage is in the new flood plane, I must pay it.....even though outbuildings are not covered.
That is incorrect. Get a flood elevation certificate for your actual home, and you pay the lower rate for not being in the flood plain, or can drop the flood insurance. I know this because we had to do it after FEMA did the maps incorrectly and put the back left corner of our garage in the floodway. Get the survey done, then talk to your mortgage company and the Flood Insurance people.
It's not cheap. The cost of a FEMA flood insurance policy for an oceanfront home in my area is about $7,000 per year. The maximum payout is $250,000 and the policy pays only the depreciated value on the home.
Several oceanfront homes were wiped out a little south of here by a hurricane several years ago. They were 40-ish year old 5 to 6 bedroom homes which together with the land they were on were each worth about $1.5 million. Because of the depreciated value on the homes, FEMA flood insurance paid out only $70,000 or so per home. That came as a shock to quite a few people. If not required by a mortgage, FEMA flood insurance isn't a good deal. Put the $7,000 per year premium in an investment account, make money on it, and in about 7 years or so you'd have whatever FEMA flood ins would pay out without having to pay any premiums in perpetuity.
Flood insurance pays for the lower of the policy limits or the actual damages to the home itself and the depreciated value of the contents. The maximum payout for the home is $250,000, for contents is $100,000. If someone is claiming that they were only paid $70,000, then that's what the buildings damages were. Flood insurance does not pay for loss of land.
"NFIP offers two types of coverage for homeowners: building property coverage up to $250,000 and contents coverage up to $100,000.
A standard flood insurance policy pays for the replacement cost of your home or the actual cash value of damages, up to the policy limit. Flood insurance, unlike some homeowner policies, does not have a guaranteed replacement cost policy that will pay above the liability limit."
They're not one foot above sea level here; they're about 14 ft above. And how can FEMA flood insurance be insolvent when they pay out only 10 times the annual premium that's been paid for 40 years (at least that's what happens around here)? Seems much more like government mismanagement to me. The premiums charged DON'T match the risk involved. A 40 year old home with one claim paying premiums for 40 years gets a minimal payout but that home in the article gets flooded 22 times and doesn't have a much higher premium? Guess what's wrong with that?
Premiums SHOULD be based on flood zone location AND claim history, not just flood zone location. Homes with a lot of claims should have MUCH higher premiums.
1. It's a government program meant to provide insurance no one else will (for a reason). Thus it is not as equitable as a private insurance plans generally will be.
3. Repetitive flood properties have been targeted by past program changes, results vary.
4. Loss rating is not done for coverages like that (like they do with auto insurance), typically because you'd never even do business with a home flooded that often. Nobody is going to argue with you that the program is well designed, it's a big topic to digest.
This is one area I don't think the gov't should be involved in...we have home owners insurance...let them cover flooding too...if the rates go up by you being stupid enough to live on the coast or in a flood plain, thats on you...plenty of areas that don't flood
Flood insurance pays for the lower of the policy limits or the actual damages to the home itself and the depreciated value of the contents. The maximum payout for the home is $250,000, for contents is $100,000. If someone is claiming that they were only paid $70,000, then that's what the buildings damages were. Flood insurance does not pay for loss of land.
Explain how a 5 bedroom home that was totally wiped out by a hurricane, not just damaged, is worth only $70,000.
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Even at the max $250,000, it would be extremely difficult to build a new home that meets current FEMA building codes without getting a huge mortgage to supplement the paltry FEMA payout.
