I am looking at buying a new house and one of the things i am obviously looking at is flood insurance. Speaking to some insurance agents it seems that everyone who has been grandfathered in to the old price for flood insurance is going to potentially getting a rate hike here in the very near future. Sounds like the 2.0 system kicks in in April and rates will be going up. I am sure my current home will be affected but in this instance, the home we were looking at purchasing was completely in Zone X but part of the lot was in zone AE and the boundary line was tangential to the detached garage. Per FEMA, that home will be listed as Zone AE and the flood insurance will be just shy of $2400/year VS the $600 the policy cost at the most recent renewal in December.

I think the renewal letters for those policies renewing in April will be going out shortly and there is going to be a LOT of sticker shock for folks out there. I was told that there is a chance that some folks may actually go down if they are well out of the flood plain or what not, instead of paying whatever the bottom line annual rate is, but that will probably not happen all too often. I was also told that there is a potential to get the rates lowered with an updated elevation certificate, but providing that was in no way a guarantee that your rate will be lowered.

It is going to be tough to stomach cutting a 2-3 grand check for flood insurance every year for a home that has never flooded. I know i will only need to use it one time in the life of the home for it to be worthwhile, but that 400% increase is tough to stomach.

Has anyone seen their new flood insurance rates?

I was told years ago by an insurance agent that if rates do increase, those who already have insurance will be grandfathered, protecting them from large increases. The policies can also be transferred to buyers of your home, which also gives them the same protection.

No more grandfathered according to agent I spoke with yesterday due to roll out of new system

Mine renewal was last week. Went from ~$500ish previously to ~$600ish currently.

SociallyConditionedAg said:

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I was told years ago by an insurance agent that if rates do increase, those who already have insurance will be grandfathered, protecting them from large increases. The policies can also be transferred to buyers of your home, which also gives them the same protection.

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This is all correct ^^^

If you have questions or need help you can call Michele 979-297-2655 or our website is www.bestinsurancetx.com

that is completely opposite what two insurance agents from two different places told me yesterday.

Sea Speed said:

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that is completely opposite what two insurance agents from two different places told me yesterday.

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FEMA Grandfathering

Quote:

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To recognize property owners who owned a policy before the maps became effective, or who built to the correct standards relative to the flood map in effect at the time of construction, the National Flood Insurance Program (NFIP) has "Grandfather" rules to allow these property owners to benefit in the flood insurance rating of their building. This rating results in a cost savings to policy holders compared to a potential higher premium rate that results from a map revision.

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Per Page #6
https://www.fema.gov/sites/default/files/documents/fema_rr-2.0-equity-action_0.pdf

Quote:

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Grandfathering has been available to policyholders when a map change results in either a rating zone or base flood elevation change. However, since Risk Rating 2.0 will be able to provide each building's individual flood risk, all policies formerly eligible for grandfathering will transition to their new full-risk premium. Increases will be gradual and within the 18% annual cap imposed by Congress. Decreases will apply upon first renewal on or after October 1, 2021. Similar to other policies, some premiums will decrease, some will increase, and some will stay about the same.

While maps have changed for many policyholders, fewer than 5% of single-family homes are actually grandfathered. As of March 2020, there are approximately 151,409 grandfathered properties nationwide. These policies represent a small percentage (4.4%) of the 3.5 million single-family, non-leveed properties insured under the NFIP. The average annual premium for these grandfathered properties is $1,077, which is lower than the average annual premium for subsidized NFIP policies (Pre-FIRM) at $1,875.

The difference between these will gradually be adjusted under Risk Rating 2.0, as FEMA will know the full-risk rate for all properties. As a result, FEMA will be able to charge more appropriate premiums that reflect each property's individualized flood risk.

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Thankfully, FEMA is completely clear on this and it's always great to hear the government start throwing around the term "equity".

Maybe I'm in the wrong, but I feel like this is shortsighted and going to bite them in the ass.

My house has never come close to flooding. Not only that, but it's a townhome so even if it did flood I could pretty easily pay for repairs. But, at $450/year, I thought that was a decent price for peace of mind. Not so much if it starts to get towards $1,000. Note: I pay in the summer, so not sure what mine is increasing to.

I understand my payments generally subsidize higher risk properties. And they seem to be raising my rates to further help subsidize those properties. But, I'll be canceling or going private.

Just found out that one of our neighbor's flood rates tripled and they're in zone X, while most of the neighborhood is in AE. I'm not looking forward to renewal.

htxag09 said:

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Maybe I'm in the wrong, but I feel like this is shortsighted and going to bite them in the ass.

My house has never come close to flooding. Not only that, but it's a townhome so even if it did flood I could pretty easily pay for repairs. But, at $450/year, I thought that was a decent price for peace of mind. Not so much if it starts to get towards $1,000. Note: I pay in the summer, so not sure what mine is increasing to.

I understand my payments generally subsidize higher risk properties. And they seem to be raising my rates to further help subsidize those properties. But, I'll be canceling or going private.

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Can you go private? I thought flood insurance was strictly through the government.

htxag09 said:

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Maybe I'm in the wrong, but I feel like this is shortsighted and going to bite them in the ass.

My house has never come close to flooding. Not only that, but it's a townhome so even if it did flood I could pretty easily pay for repairs. But, at $450/year, I thought that was a decent price for peace of mind. Not so much if it starts to get towards $1,000. Note: I pay in the summer, so not sure what mine is increasing to.

I understand my payments generally subsidize higher risk properties. And they seem to be raising my rates to further help subsidize those properties. But, I'll be canceling or going private.

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I totally agree. Mine has gone up from $450 to $572 over the past few years. I was already questioning the need for my policy since I'm 20 ft higher that the bodies in my 'hood that flooded.

Mine renews in April. If the premium goes up substantially, I'm killing it. Like you said, FEMA is cutting off its nose to spite its face. They need to keep our premiums low so our payments subsidize properties with higher risk.

My understanding is you can. Never been profitable for a company but maybe that's changing with these increases. I use goose head for my flood insurance and have read on other threads that they've recently quoted people private.

htxag09 said:

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Maybe I'm in the wrong, but I feel like this is shortsighted and going to bite them in the ass.

My house has never come close to flooding. Not only that, but it's a townhome so even if it did flood I could pretty easily pay for repairs. But, at $450/year, I thought that was a decent price for peace of mind. Not so much if it starts to get towards $1,000. Note: I pay in the summer, so not sure what mine is increasing to.

I understand my payments generally subsidize higher risk properties. And they seem to be raising my rates to further help subsidize those properties. But, I'll be canceling or going private.

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Do you want the system to be solvent based on the premiums that are brought in or do you want artificially low rates that are subsidized with federal taxes? These are the choices.

TMoney2007 said:

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htxag09 said:

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Maybe I'm in the wrong, but I feel like this is shortsighted and going to bite them in the ass.

My house has never come close to flooding. Not only that, but it's a townhome so even if it did flood I could pretty easily pay for repairs. But, at $450/year, I thought that was a decent price for peace of mind. Not so much if it starts to get towards $1,000. Note: I pay in the summer, so not sure what mine is increasing to.

I understand my payments generally subsidize higher risk properties. And they seem to be raising my rates to further help subsidize those properties. But, I'll be canceling or going private.

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Do you want the system to be solvent based on the premiums that are brought in or do you want artificially low rates that are subsidized with federal taxes? These are the choices.

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I get what you're saying. But the higher the premiums are for low risk properties that just have it for peace of mind, the more will cancel their policies. I'm not just going to accept a 2-3x increase in my premiums to subsidize people who want to live in a flood plain but want affordable flood insurance.

So yes, the system needs to be solvent based on the premiums coming in. But they need to realize that the higher the premiums for low risk properties, the fewer properties that opt in. There's a balance on the premiums of these properties. I think they're starting to teeter past that balance.

SociallyConditionedAg said:

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htxag09 said:

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Maybe I'm in the wrong, but I feel like this is shortsighted and going to bite them in the ass.

My house has never come close to flooding. Not only that, but it's a townhome so even if it did flood I could pretty easily pay for repairs. But, at $450/year, I thought that was a decent price for peace of mind. Not so much if it starts to get towards $1,000. Note: I pay in the summer, so not sure what mine is increasing to.

I understand my payments generally subsidize higher risk properties. And they seem to be raising my rates to further help subsidize those properties. But, I'll be canceling or going private.

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Can you go private? I thought flood insurance was strictly through the government.

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Yes there are plenty of private options in the market that offer pretty good coverage options. Here is a list of things you would see with private carriers that you don't see on the NFIP product

- higher limits
-replacement cost on contents
-pool refill/repair

Just paid mine this month. Increased to 648 from 572. Which is a 13.28 percent increase. Have the max policy.
Kingwood and house has never flooded. At least 10 feet above the 2017 Harvey flood zone. After Harvey, my wife insisted on getting flood insurance…

How is going to affect coastal homes on pickings. Let's say the ground elevation is < 10 ft, but the house is on 10 ft pilings. Do you get the 10 ft rate, or the 20 ft rate?

My old waterfront home would have got the 20 foot rate in your scenario. I don't imagine that it has changed. It is the entire point of the stilts.

That's what I thought, but just checking for new stuff.

Mas89 said:

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Just paid mine this month. Increased to 648 from 572. Which is a 13.28 percent increase. Have the max policy.
Kingwood and house has never flooded. At least 10 feet above the 2017 Harvey flood zone. After Harvey, my wife insisted on getting flood insurance…

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who did you use? my wife owns a house in Houston that the policy lapsed. she's trying to get replacement coverage right now.

Wright National Flood Insurance. Homeowners policy is thru Texas farm bureau insurance and my agent set up the flood insurance policy. Billed by and paid direct to Wright.

WhoopRAB said:

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My parents' homeowner policy renewal in a coastal county just went up from $3385 to $4982. It includes windstorm coverage.

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I'm an independent agent on the coast. That's about all we're doing right now - remarking/requoting renewals. It's crazy!

rlb28 said:

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WhoopRAB said:

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My parents' homeowner policy renewal in a coastal county just went up from $3385 to $4982. It includes windstorm coverage.

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I'm an independent agent on the coast. That's about all we're doing right now - remarking/requoting renewals. It's crazy!

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Crazy to hear and crazy $$ on the increase!! From an agent's perspective, what is driving this?

I have some investment properties in "flood zones" (not coastal) and am reaching out to my agent to see if we're going to get hit hard on our renewals.

What's the deal with renewals this year? I purchased my policy initially through my insurance agent. But every year since that I've renewed, FEMA has sent me a bill for the renewal, and I paid the premium on the FEMA website by credit card. No agent needed.

I got a postcard in the mail today that says I have to contact my insurance agent to renew my policy this year.

Not speaking about Flood specifically-But the cost of insurance has risen significantly due to a lot of factors, but I'd point at two primary ones. The rising cost of labor & materials for residential construction materials (and same for auto insurance with car parts and vehicles). Nationally, the cost of construction materials rose around 20% from 2020-2021. That increase hasn't shown signs of slowing down. This results in the cost of claims to increase significantly. Supply chain/material and labors increase along with the 2021 freeze being the largest claim event in history bankrupted/caused a lot of carriers to pull back writing in Texas. Most carriers now feel over saturated in Texas and don't really know how to accurately predict what to charge because it's difficult to predict the materials and labor market. This is called a "hard" market because carriers aren't being overly aggressive with writing business in Texas and are choosing to be much more careful about what homes they want to insure by pricing themselves out at times or having very strict underwriting requirements.