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Started By
Message
re: Flood insurance rates went up again
Posted on 5/2/23 at 9:25 am to Chad504boy
Posted on 5/2/23 at 9:25 am to Chad504boy
quote:
No, you're paying for the actual risk of flooding now.
Maybe.
I agree the old system was faulty, but Risk 2.0 is messy as hell too.
1
Posted on 5/2/23 at 9:34 am to meeple
quote:
Wouldn't the new owners just go get a new policy if they want flood insurance? I've never heard of this being a disadvantage when selling.... can you please elaborate?
Take the example I mentioned earlier - $700/yr current policy that is transferable but would be $6,000/yr if it was bought outright.
If you assume that the buyer only wants to pay a certain amount per month for the mortgage and escrow, the difference between those rates adds up quickly. Assuming a $2,000 month all in cost, a new flood policy vs the transferred one would be the difference between a $280k offer and a $350k offer.
Now, a smart buyer knows that policy is going up 18% per year and will get to $6,000 eventually, but most people don’t take that into consideration enough when they’re buying a home.
Posted on 5/2/23 at 9:45 am to slackster
quote:
Maybe.
I agree the old system was faulty, but Risk 2.0 is messy as hell too.
Sure no perfect system. We're in part where we at bc all of the "preferred zones" homeowners weren't forced to purchase flood prior. Not saying this new way fixes things but more people should have been purchasing $400 flood policies and it would have better supported the entire system while giving people who indeed carried risk of flooding actual flood coverage. People in flood zones live with a false sense of safety.
Posted on 5/2/23 at 10:40 am to Chad504boy
Exactly,
All this is going to do is get the people least likely to flood to cancel en masse. So you lose a ton of revenue from those people, then you will have to keep raising the rates further and further.
A bit short sighted if you ask me. The whole premise of insurance is to shoulder the risk by collecting as much premiums as possible. They should have just had the people at most risk of flood shoulder the true costs.
All this is going to do is get the people least likely to flood to cancel en masse. So you lose a ton of revenue from those people, then you will have to keep raising the rates further and further.
A bit short sighted if you ask me. The whole premise of insurance is to shoulder the risk by collecting as much premiums as possible. They should have just had the people at most risk of flood shoulder the true costs.
Posted on 5/2/23 at 11:01 am to PistolPete45
If there's a ton of cancellations, you better believe that will be changed back. Let's hope there's no major disasters this year as well.
Posted on 5/2/23 at 11:01 am to slackster
quote:
Take the example I mentioned earlier - $700/yr current policy that is transferable but would be $6,000/yr if it was bought outright.
If you assume that the buyer only wants to pay a certain amount per month for the mortgage and escrow, the difference between those rates adds up quickly. Assuming a $2,000 month all in cost, a new flood policy vs the transferred one would be the difference between a $280k offer and a $350k offer.
Now, a smart buyer knows that policy is going up 18% per year and will get to $6,000 eventually, but most people don’t take that into consideration enough when they’re buying a home.
I see now. I'm planning on going to my carrier who administers it for me to see what my rate would be if bought outright and weigh that out.
But as the poster above mentioned.... I'm likely to cancel as I'm not likely to flood.
Posted on 5/2/23 at 11:21 am to meeple
quote:
I'm likely to cancel as I'm not likely to flood.
famous last words.
Posted on 5/2/23 at 11:36 am to Chad504boy
quote:
famous last words.
I know.... I'm just tired of the increases. Is it a risk? Yeah and we have substantial savings in the rare event.
Further, house is almost paid off and I'm highly considering dropping wind/hail for the same rationale. This is the more likely to get dropped than flood, as we are far enough inland that the only real significant threat for a total loss is a tornado.
This post was edited on 5/2/23 at 11:37 am
Posted on 5/2/23 at 11:40 am to meeple
Hail got me a 25k roof so I'm not getting rid of that anytime soon 
Posted on 5/2/23 at 1:16 pm to indytiger
You got off easy. Entire system is a complete scam. US sending over half trillion dollars to corrupt Ukraine while screwing homeowners over $25 Billion. Simply another f-cking tax under a different category.
Posted on 5/2/23 at 1:22 pm to PUB
quote:
US sending over half trillion dollars to corrupt Ukraine
its a legitimate gripe imo when we're sending monies abroad for nothing but political corruption yet we can't balance our own checkbook and help out our own people trying to purchase affordable coverage.
Posted on 5/2/23 at 1:34 pm to meeple
quote:If you look at your current declarations page, the "full risk rate" should be on there. In the section where they have premium, fees, etc all itemized.
I'm planning on going to my carrier who administers it for me to see what my rate would be if bought outright and weigh that out.
Posted on 5/2/23 at 1:54 pm to Chad504boy
And how many trillions have we wasted on illegal aliens over the decades?
Posted on 5/2/23 at 3:51 pm to Tiger Prawn
quote:
If you look at your current declarations page, the "full risk rate" should be on there. In the section where they have premium, fees, etc all itemized.
I never realized this. Looking at my dec page, full-risk premium is $1200. New annual premium is just short of $800.
Thanks for pointing that out!
This post was edited on 5/2/23 at 3:52 pm
Posted on 5/2/23 at 8:27 pm to meeple
quote:
never realized this. Looking at my dec page, full-risk premium is $1200. New annual premium is just short of $800. Thanks for pointing that out!
That’s not too bad. Wouldn’t be that big of a lick for a new homeowner, but it still sucks.
Posted on 5/2/23 at 8:40 pm to Tiger Prawn
quote:
The dec page should show the full risk rate before credit for the 18% max annual increase cap
Rated at around $1,700.
Pay $800.
Posted on 5/2/23 at 8:48 pm to Chad504boy
quote:
famous last words.
The amount of people that expose themselves to that much risk over $600 a year blows my mind.
Always carry flood in Louisiana. No exceptions.
Posted on 5/3/23 at 10:58 am to jsk020
quote:
Prepare your butthole it’s going up 18% each year til you hit your actual new rate. I got my new construction in Metairie this year and it’s already at the new 2.0 rate at $1500. Make sure you get your house surveyed, it can help reduce your rate possibly
In Florida we call that 18% hike the “glide path”. My wind went up $2k this year. I’m 100% ready to sell and bolt Florida if I could replace my income. I fear it’s going to be harder to sell in the future because of the cost/availability of insurance.
Posted on 5/3/23 at 11:10 am to indytiger
Mine went down $4.00.
Posted on 5/3/23 at 11:17 am to iron banks
quote:
The program is doomed to failure
Yep. I'm in "X" and didn't come close to flooding in 2016. The amount they are asking is absurd. I've always had flood insurance, first time I'm not even considering it.
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