The most recent fallout from the Biggert-Waters Flood Insurance Reform Act of 2012 includes a storm of Mississippi flood insurance rate hikes that could affect homeowners. The phasing out of federal subsidies for flood-zone properties has caused a great deal of concern among real estate agents and homeowners who fear rate increases and more.
What Prompted the Biggert-Waters Act?
The Biggert-Waters Act was enacted to help the federal government eliminate a $25 billion shortfall in flood claims. The aim was to make sure flood insurance rates reflect the risk of building and owning homes in designated flood plains. Since 1968, when Congress created the National Flood Insurance Program (NFIP) to help homeowners and property owners gain access to financial protection through flood insurance, participating communities agreed to adopt and enforce ordinances that meet or exceed Federal Emergency Management Agency (FEMA) guidelines.
Key issues causing the dismay over the Biggert-Waters Act include:
- Stopping of transfer of policies upon the sale of a property affected by a flood – it has the effect of making properties unsellable.
- Over 40% of premium costs going to the NFIP and private insurance companies for plan administration – a gross overage cost.
- Over 40% of federally backed mortgages require homeowners to carry flood insurance but the coverage is never purchased – keeping the costs high for those who do purchase it.
Opponents contend that if the act is implemented as it stands now, property owners will be financially devastated, property values will drop significantly, and mortgages may go into default causing a chain reaction to local governments. What does all this mean for property owners in Mississippi?
Call The Nowell Agency Inc. at 601.992.4444 for more information about Mississippi flood insurance or request a quote online.
Factors That Can Affect Your Mississippi Flood Insurance Rates
A number of factors are considered when your flood insurance premium is determined. These factors include the following:
- The amount and type of coverage purchased
- The location and flood zoning
- The design and age of your property structure
For homes in high-risk areas (e.g., Special Flood Hazard Areas or AE, VE Zones) built after the first flood insurance maps were drawn for your community, the elevation of the building in relation to the base flood elevation may also be necessary.
Consult your local team of flood insurance experts at The Nowell Agency Inc. and request a quote online. Or call us at 601.992.4444 to discuss your insurance needs and the options available to you when choosing Mississippi flood insurance plans.