Flood insurance changes a cause for confusion

Residents who live amidst flood zones might soon pay more to live there.
Alex Doty
Nov 30, 2013


In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act. It calls on the Federal Emergency Management Agency to change the way the National Flood Insurance Program is run.

The act requires the program to raise rates to reflect true flood risk, make the program financially stable and change how updates of the Flood Insurance Rate Map impacts policyholders.

The bottom line is that the changes will lead to premium increases for some policyholders.

“The flood insurance issues are impacting people in these new flood maps, and they’re facing premiums they can’t pay,” said Dale Zahn, CEO of the West Michigan Lakeshore Association of Realtors.

Zahn said what’s happened is FEMA redrew flood maps and pulled subsidies for flood insurance that were once there.

“This is a mess that is only going to get worse,” he said. “We’re absolutely convinced it will affect people in Grand Haven and Spring Lake. There’s lots of water here.”

Homeowners and homebuyers have already faced increases in premiums. So large are some increases, Zahn said, that some have found homes unsellable and unaffordable.

“This could be worse than the recession,” he said. “(Homeowners) will walk.”

Zahn gave several examples of how this has played out in West Michigan.

“I did a presentation in Muskegon, and I was hearing talks of property being unsellable,” he said.

One case involved a woman who purchased a home and was told no flood insurance was required. Only recently did she receive a letter from her lender saying she needed to have the coverage added — a $200 per month payment she says she can’t afford.

“There’s also one in Holland that lost a sale, and it only backs a creek,” Zahn said.

In this case, the $149,000 home was under contract to sell when the buyer learned from the lender that, since there was a creek behind the home, the property was included in new flood zone maps. The premium jumped to $8,000 per year, Zahn said.

For local insurance agents, the changes have left just as much head scratching.

“It’s very confusing,” said Mike Wheeler of the Oakes Agency in Grand Haven. “We are kind of learning on the fly.”

To read more of this story, see Saturday’s print or e-edition of the Grand Haven Tribune.



It all depends on you mortgage company, if you have one, i lived on the north side of Jackson street near the river, my mortgage company said i must have flood insurance or we will buy it for you, ouch, i talked with neighbors in my area and they said they don't have flood insurance and didn't know it was requirement, many had their houses paid for, it will be interesting how they are going to make home owners by insurance


I've never been able to understand why anyone would want to build their house on a flood plain. Sure, might be a great view, but a house full of water would really suck if it ends up ruining all your treasured possessions.

Why would anyone not think that if you're going to plant yourself in (possible)harms way, that you shouldn't have to pay more for insurance to cover your supposed dangerous location? In essence what you're doing is gambling with your investment, hoping that you don't lose your shirt to high waters.

Insurance companies hate to give back the money they collect in fees so what would make anyone think that they're not going to charge more for a situation where flooding is a constant concern? I'm sure they'll overdo their concern and their fees, but again, is this really a surprise? Insurance is one of the biggest scams going in this country these days.


the more i read this story, sounds more like fema wants to raise money they have lost with all the floods in the recent years, not here, but around the america, in case of 149000.00 house, flood insurance would be 8000.00 sounds over rated, mine only costs 400.00 for the year, just saying


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