Flood Insurance is for some people a reality of home ownership. The property is located in a flood plain and if there is a home mortgage the lender is going to require flood insurance to protect their asset. What many people don’t know about Flood Insurance is that the federal government since 1968 has created a program to subsidize flood insurance in areas where the local government adopts the FEMA flood management guidelines. Why do we need federal support for flood insurance? Well as you can see by the recent events in Texas from Hurricane Harvey flooding is typically a widespread event and thus the damage is also widespread and thus claims would be large and concentrated. If insurance companies just calculated premiums based upon the true risk the typical homeowner would not be able to afford the insurance. Thus the insurance companies have a reduced risk premium and the federal government helps to subsidize the rest. They don’t want to invest in a high risk so they force local governments to follow FEMA guidelines to help eliminate that risk through local zoning and codes.
On September 30, 2017 the current plan for NFIP is set to expire and NAR and REALTORS are uniting to request for a NFIP reform and extension. You could imagine the hardship if homeowners were suddenly required to fully fund the premiums at 100% of the risk of a flood the costs may make it impossible to stay in a home and also prohibitive for the future sale of some homes. You can learn more about NFIP and Flood Insurance reform online.
If you have local questions about Flood Insurance with Franklin Real Estate please call Gray Fox Realty at 615-656-8181 and we would be glad to talk t you about options.
We just want to also thank all of those helping others get through the devastation in Houston and pray for the best in the way of recovery for all those impacted.