Friday, October 25, 2013

Flood Risks Set to Spike Up Insurance Rates

According to the Boston Harbor Association, climate change is increasing the likelihood of coastal and river flooding due to sea level rise and extreme weather events. This impact on the climate is expected to cause frequent flooding in the near future. A recent article by the Boston Courant also states that the Federal Emergency Management Agency, also known as FEMA, is expanding the high-risk flood zone. This will require mortgage owners to buy flood insurance and cause premium spike to those who already possess flood insurance.

Here are some more important facts and information from the Boston Courant about how flooding can affect mortgage owners in the future:
  • According to the Environmental Department, new flood zone maps should be available at the end of October and those who live in those zone are most likely acquired to possess flood insurance
  • According to the Boston Harbor Association, by 2050, sea level in Boston will rise 2.5 feet at which if a storm similar to Hurricane Sandy would hit Boston, the entirety of Back Bay and South End would be flooded
  • An insurance-to-value appraiser expects premiums to jump three to four times their current rate (a typical single family home pays $1,800 in annual premium costs)
  • The Flood Insurance Reform Act of 2012  increased federally subsidize flood insurance rates by up to 25% a year (visit the website for more information)
  • The upcoming hurricane season will allow most homeowners to gauge how bad flooding can get in their area and reveal any infrastructure problems
With the climate changing in our world, it seems as if flooding is only going to expand and get more severe in the future. It would be smart to look more into flood insurance and invest in one if you do not possess insurance. Consult your insurance company for opinions, tips, and advice.

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