Who Will Pay More For LBI Flood Insurance

Dated: 09/16/2013

Views: 1600

Understanding Flood Insurance Rates on Long Beach Island

Long Beach Island and The LBI Real Estate Market

After Hurricane Sandy struck LBI, one of the first concerns LBI homeowners and those looking to buy or sell in the Long Beach Island NJ real estate market had was Who Will Pay More for Flood Insurance on Long Beach Island NJ!? Flood insurance is a national program so changes made to the National Flood Insurance Program are widespread and require Congressional Approval. Therefore, it is unfair to state that Hurricane Sandy is the cause for any increase in flood insurance on Long Beach Island. In short:

  • Most flood insurance policies on LBI and elsewhere are already actuarially rated 
  • 5% of Pre-FIRM (meaning older non elevated homes) that are not primary residencies, are businesses or are properties that have sustained repetitive losses will see a 25% rate increase until the true risk premium is reached
  • 10% of Pre-Firm primary residencies will retain their federal subsidies and see little to no increase until the policy is changed or cancelled

A flood elevation certificate is the only true way to determine the cost of flood insurance and is therefore the best way to determine who will pay more for LBI flood insurance. This has tremendous bearing on the LBI real estate market as homes that will be paying less for flood insurance will be seen as advantageous to those that are paying more. Regardless, just because a house is not elevated on pilings (and to be clear NOT all homes on LBI need to be raised) does not mean the value of that house is shattered. The LBI real estate market has been and continues to be strong even in the case of pre FIRM homes as the increases seen by these homes should be very manageable. To understand more about who will pay more for LBI flood insurance please visit the link below:

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