This is the first duplex I ever purchased. You wouldn’t know it, but the duplex resides in a FEMA flood zone. According to the definitions I could find, during a 100-year event this property may experience ‘localized surface ponding’. You would be forgiven if you didn’t know this was a flood zone. I will admit, the property does slope down, away from where this picture was taken. I can understand that the backyard may be in the flood zone. I may get some water in the basement, but this street is not included in the flood zone. All of the habitable portions of the house are non-flood areas.
The bank wants to protect it’s investment, so I am required to carry flood insurance on this property. In 2012, Congress decided to not renew the federal subsidies on flood insurance, meaning rates will skyrocket. While doing some research for this article, I saw some quoted rates of $87,500 to insure some properties, that’s just the annual premium!
In early January, I received a letter from my flood insurer informing me they were dropping my coverage, that I would have to get an official FEMA flood survey (~$1,000) and only then would my insurer reconsider my flood insurance. I had a mild moment of panic, then frustration, then figured I would get in touch with Chad, my insurance guy (he’s an awesome guy. Invited me over for beer at his farm; will probably take him up on it this year).
I asked Chad what I had to do to be in compliance. He replied “Liam, this is probably really bad news” (note to insurance sales people: It’s QUITE distressing when you guys tell your clients it’s bad news.) Chad then proceeded to tell me to wait and not panic (yet), because he heard the Senate was going to vote on the Homeowner’s Flood Insurance Affordability Act, which would push off the rate increases for five years.
Over the weekend, I decided to see what had happened with the vote. Well, I learned that the bill is sort of stalled in the House right now. There are enough committed Representatives that the bill would pass, so long as the Speaker brings the bill up for a vote. I was going to write to a Representative who is one of the sponsors on the bill, but then thought I should see what my Representative thought of the issue.
Apparently my Representative, Glenn “GT” Thompson, thinks it would be a good idea if the rate increases were pushed off for five years. He also thinks there should be a vote, but he didn’t mention pushing to bring a vote to the floor. (Note: I think it would be a great idea if the rate increases were pushed off for five years)
I decided to email my Representative and ask him for an update on the vote and when I could expect to know if I will need to spend $1,000 to survey my property as I would much prefer to not spend that $1,000 on a potentially meaningless flood survey.
Moving forward, I am only required to keep flood insurance for any portion of the building that has a loan. I plan to pay off this loan as quickly as possible, dumping almost every spare cent to paying down this loan, so I’m not required to keep the flood insurance. I know it would be a risk, but I am willing to take that risk so I don’t have to pay who knows how much to insure my property.
I’ll let you all know if I hear back from my Representative.