MIAMI (CBSMiami) – June 1st kicks off Hurricane season, and this 12 months a whole lot of thousands of owners on South Florida will see their flood insurance fee spike.
FEMA rolled out its Risk Rating 2.0 system on April 1st, which for the primary time in 50 years, modifications how the company assesses a property’s flood threat. FEMA’s new system components within the quantity of rainfall, value of rebuild, sea degree rise, and flood threat.
READ MORE: Deadly Shooting in South Miami-Dade underneath investigation
According to FEMA, prior to now owners with decrease property values had been shouldering the next monetary burden than owners with dearer properties. The new threat evaluation plan is meant to degree the enjoying area for owners. Insurance consultants say some owners will likely be hit with sticker shock, particularly when you’re buying a brand new dwelling.
“They tend to be surprised on the day of the closing, ‘oh by the way the bank says I need to buy flood insurance. That used to be $300 – $400 now that could cost you $2000 – $3000, and that could be a deal breaker as far as whether you’re qualifying for a property,” stated Luis Gazitua, Partner of JAG Insurance Group.
READ MORE: Police examine deadly double taking pictures in NE Miami
“It could affect our real estate market here in South Florida, I do know that there are some lenders who started to look at only offering up to 20 year loans on coastal properties,” added Gazitua.
Analyst undertaking that greater than 3.8 million insurance policies throughout the nation will likely be impacted by FEMA’s Risk Rating 2.0 system, although solely %4 of all coverage holders will see the very best will increase.
“For example West Palm Beach had their maps changed, now all of a sudden, a lot of homes are in a flood zone,” stated Gazitua. “Then lenders are starting to require, you’ll get the letter in the mail, now you have to buy flood insurance,” added Gazitua.
MORE NEWS: Update: Missing 4-year-old Isiah Williams & his mother Tramika Williams discovered secure
Mortgage lenders would require insurance for houses that fall inside the following zones: AO, AE, AH and VE. As hurricane season 2022 begins, Gazitua suggests all owners be certain they’re lined.
“We’re pretty adamant about telling everyone if you live in Florida, you live in a flood zone,” stated Gazitua.