In June of 2012, a large overhaul of the National Flood Insurance Program (NFIP) was passed by both the House and the Senate with a 373-52 and 74-19 vote, respectively. When Obama signed the bill on July 6 of the same year, the big “I,” Congress and the President intended to address the 26 billion dollar debt the national Flood Insurance Program accumulated over 40 years. However, the overhaul is changing more than anticipated.
The bill otherwise referred to as the Bigger-Waters Flood Insurance Reform Act of 2012 is impacting the real estate market in unexpected capacities. Although many of its provisions have been implemented, its effects are just now being felt by New Jersey homeowners.
The bill entails a number of provisions, but for the purposes of this post, we will briefly outline the key provisions and its effects on NJ homeowners.
What is the Biggert-Waters Flood Insurance Act of 2012?
- Availability of Insurance for Multi-Family Properties – Sec. 100204
- Eligibility for Flood Insurance for Persons Residing in Communities Making Adequate Progress on the Improvement of a Flood Protection System – Sec. 100230
- Clarification of Residential and Commercial Coverage Limits – Sec. 100228
- Minimum Annual Deductibles Changes – Sec. 100210
- National Flood Mapping Program -Sec. 100216
- Insurance Coverage for Private Property Affected by Flooding from Federal Lands- Sec. 100241
- Treatment of Swimming Pool Enclosures Outside of Hurricane Season – Sec. 100242
How have NJ homeowners react to the Biggert-Waters Flood Insurance Act of 2012?
Because the bill seeks to make up for the NFIP’s deficit; subsidies for second homes must be eliminated, new flood risk zone maps must be redrafted, premium rates must be raised and risks must be more accurately identified.
The surge in New Jersey flood insurance premiums have affected homeowners and realtors alike. According to Lock Haven’s The Express, those who purchase a home in one of New Jersey’s high risk zones may see the premium multiply by four to ten. To put that into prospective, a homeowner may have to pay a mortgage’s worth of flood insurance rates.
What do you think the effects of these reforms will be? Do you think the reforms reflect the true risks homeowners face? We’d love to hear from you.
At Vreeland, as a full-service independent insurance agency and as an advisor to many communities throughout the state, part of our integrated protection solution is to talk with our customers — and future customers — about the need for New Jersey flood insurance. The right policy can provide you with a safety net against losses resulting from heavy rains, flood surges, snow melts, storm drain backups, etc.
Contact Us Today (877) 755-3767