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Flood insurance increases may have negative impact on real estate market

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Posted: Thursday, September 19, 2013 6:23 pm | Updated: 6:39 pm, Thu Sep 19, 2013.

SARASOTA FL,--- Homeowners with flood insurance are bracing for changes to the National Flood Insurance Program.

"Its a drastic increase it's really going to effect the retired clientele drastically," said Tony Grello.  He is one of many Suncoast residents worried about changes to the National Flood Insurance Program.  In 2012 congress approved the Flood Insurance Reform Act. It puts an end to federal flood insurance subsidies, which means come October 1st customers could see a 20% increase to their flood insurance premiums.

"I've owned this home for 22 years and I've never had a claim but not my insurance is going to go up 20 to 30%.  I don't think its fair." added Grello.

And, he isn't the only one who thinks the changes are unfair.  Governor Scott sent a letter to Senators Marco Rubio and Bill Nelson urging them to pass a law delaying the implementation of rate increases.  In that letter Scott also said,"This unfair consequence could devastate parts of Florida's real estate market, stymie our economic recovery and diminish the state's tax base.  Insurance agent Florence Conlan agrees, "Older charming Florida homes are not going to be able to sell because of the flood insurance," said Conlan.           

Flood insurance is required for all mortgages.  Conlan says changes to the National Flood Insurance Program would force the full unsubsidized flood insurance rate on homebuyers.  "When a seller is paying $1,900 flood premium and a buyer comes along and they get a quote for $9,000 they are not going to want to buy the house. They are not going to be able to pay for the flood insurance," Conlan added.

Those not purchasing a home would see as much as a 20 percent increase each year for the next 5 years --  until they are playing the full unsubsidized rate.

"Only the wealthy is going to be able to pay to live on the water. There's no way the average person who lives on the water can make that kind of a payments," said homeowner Nancy Grello. 

"You cant afford the insurance and we can't afford to sell our house, so I think its a double edge sword," said Tony.

Officials say only 20% of federal flood insurance customers will be effected by the rate changes but more than 35% of them are right in Florida. 

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1 comment:

  • 56bethpager posted at 7:57 pm on Thu, Sep 19, 2013.

    56bethpager Posts: 4

    This is a governmental catastrophe! People are going to walk away from their houses and no one will be able to afford to buy them. The state of Florida apparently doesn't care as the governor is missing in action on any involvement, and our allege representatives in Congress are, as usual, asleep at the wheel.

    How are the retired people who bought their houses twenty or thirty years ago, paid them off, and are living on a fixed income, going to pay five time the insurance they have been paying. Everybody already knows that the insurance companies control the state house by "buying"(contributing to the re-election of) their (our ?) representatives so the state gives them anything they want like they did for Duke Energy.

    But this, this is a disgraceful even coming from Congress. What are the rules for impeachment?