Many people who are dealing with the mess left by Hurricane Sandy are facing a harsh new reality. Either spend tens of thousands of dollars to raise your home or spend thousands more per year for flood insurance. New FEMA rate maps have been released that will change the flood insurance for many.
According to this article, $20,000 a year for flood insurance? Sandy survivors face tough rebuilding choices, the cost of living in a flood prone area has gone up dramatically. For instance one homeowner faces lifting his home up to 14 feet. If he fails to do so, his annual flood insurance premiums will soar to over $20,000.00. This has left the homeowner deciding whether he should rebuild or simply give up on the home.
Unfortunately, this man’s story is not unique. We have heard from many clients in similar situations. Many times their flood insurance settlements are not enough to rebuild the home as it was, let alone raise the home to comply with new standards. Faced with financial ruin, many are simply using their flood insurance proceeds to pay off their mortgages and selling their property for the value of the lot. It is a difficult decision that many face.
The decision will get even tougher soon. Starting in late 2014, federally subsidized flood insurance for some primary residences will be phased out. This will leave many to search for flood insurance on the open market. While policies may be available, they will be substantially more expensive than the national flood insurance program. In the end, it is simply going to get far more expensive to live in flood prone areas.