Flood Insurance Rate Increases on Long Beach Island NJ and and LBI New Jersey Real Estate Market
Who Will Pay More for Flood Insurance on Long Beach Island NJLong Beach Island NJ and Flood Insurance
After Hurricane Sandy struck LBI, one of the first concerns LBI homeowners and those looking to buy or sell in the Long Beach Island NJ real estate market had was Who Will Pay More for Flood Insurance on Long Beach Island NJ!? Flood insurance is a national program so changes made to the National Flood Insurance Program are widespread and require Congressional Approval. Therefore, it is unfair to state that Hurricane Sandy is the cause for any increase in flood insurance on Long Beach Island. Regardless, changes are coming to the National Flood Insurance Program and these changes will impact Who Will Pay More for Flood Insurance on Long Beach Island NJ and the LBI real estate market in general.
Biggert Waters Flood Insurance Reform Act of 2012
The Biggert Waters Act was passed in September 2012 about a month BEFORE Hurricane Sandy made landfall. The act was designed to, in short, to make the National Flood Insurance Program more fiscally solvent and be able to weather (no pun intended) major disasters such as Hurricane Katrina and Hurricane Sandy. The program is far reaching in its reform however a surprising number of homeowners on Long Beach Island and elsewhere will not have the major increases that are widely publicized. According to the National Flood Insurance Program:
- Most flood insurance policies on LBI and elsewhere are already actuarially rated (meaning they are current with the program’s guidelines. This number is roughly 81% of all policies held by the National Flood Insurance Program!
- 5% of Pre-FIRM (meaning older non elevated homes) that are not primary residencies, are businesses or are properties that have sustained repetitive losses will see a 25% rate increase until the true risk premium is reached. For many homes on Long Beach Island, this will equate to roughly a $500-$700 ANNUAL increase although it is important to confirm this with an insurance agent as each property is unique.
- 10% of Pre-Firm primary residencies will retain their federal subsidies and see little to no increase until the policy is changed or cancelled.
- 4% of the National Flood Insurance Program accounts for Pre-Firm condominiums and multi-family homes that will see no immediate increase.
Obtaining a flood elevation certificate and consulting with an insurance agent is the only true way to understand the risk associated with a property and Who Will Pay More for Flood Insurance on Long Beach Island NJ. For some, flood insurance rates will decrease, for other it will stay the same and for some the rates will increase.
Flood Insurance on LBI NJ and the Long Beach Island New Jersey Real Estate Market
There is no question that flood insurance plays a major role when an individual or family is considering buying or selling in the LBI real estate market. Understanding how flood insurance varies from property to property can be a major reason to buy or not buy a specific property. In general, buyers should always ask to see if there is a flood elevation certificate on file when looking at homes in the LBI real estate market. in the absence of an elevation certificate, there should be protection in the contract to ensure the buyer does not overpay for a property.
if you would like additional information about Who Will Pay More for Flood Insurance on Long Beach Island NJ or the LBI NJ real estate market, please do not hesitate to contact me, Nathan Colmer, anytime! You can also Search All Homes For Sale in the LBI Real Estate Market Here.
Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
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