New flood insurance unfair to homeowners

When Hurricane Sandy ravaged the East Coast, insurance companies shelled out huge amounts of money to those who made claims based on damages suffered during the historic storm.
Dec 13, 2013


In response, the Federal Emergency Management Agency recently re-drew flood plain maps and pulled subsidies for flood insurance to help recoup some of those losses.

That sounds innocent enough, until you hear some of the horror stories that have ensued.

Suddenly, houses backing up to innocent little creeks are required to have flood insurance. A $150,000 home in Holland with a small creek in its backyard suddenly requires flood insurance costing $8,000 a year.

A Muskegon County family bought a home that didn’t require flood insurance, but shortly after the sale was completed, their loan was sold, and the new mortgage company is requiring a $200-a-month flood insurance premium.

Our real estate market in West Michigan is finally rebounding after a years of plummeting housing values. People are finally able to sell their houses without losing their shirt in the process.

But with this new development, many families are suddenly faced with premiums they can’t afford. Their houses are considered unsalable and unaffordable. Many have no choice but to walk away from their mortgage, letting the banks take over ownership of their house.

Local Realtors are doing their best to combat this problem. Dale Zahn, CEO of the West Michigan Lakeshore Association of Realtors, and his fellow Realtors have taken it upon themselves to put an end to what they consider a gross injustice.
On one hand, this obviously affects their opportunity to earn a living.

Even more discouraging is the fact that these new and seemingly unreasonable premiums throw a huge curve ball to those attempting to realize their dream of owning a home.

We commend Zahn and his fellow Realtors for their efforts, and hope this discouraging situation can be quickly resolved.

Our Views reflects the majority opinion of the members of the Grand Haven Tribune editorial board: Kevin Hook, Cheryl Welch, Matt DeYoung, Alex Doty and Fred VandenBrand. What do you think? E-mail us a letter to the editor to or log-in to our website and leave a comment below.



The problem is not isolated to West Michigan - it is hitting homeowners nationwide. The Gubmint decided to take over flood insurance in the 60's to ensure subsidized flood insurance (often for millionaires living on the water and with second homes on the water). As a usual, the federal program blew through its budget, causing the gubmint to "fix" the problem it had created.

They passed the Biggert-Waters Act (You know, that MENSA member, Maxine Waters-we're going to nationalize the oil industry) and an Illinois Republican. Now the National Flood Insurance Program is using data from FEMA to cause huge increases to property owners who never needed flood insurance to start with - big government one size fits all, YaKnow- and Maxine is saying now she never intended or realized this would happen. Mary Landrieu is as surprised by the rise in costs as she is surprised that Obamacare is causing millions to lose the insurance they like and to have to pay more for the Obamacare version. Go Figure!

Unlike Kathleen Sebelius and Obama, who find themselves able to change provisions of Obamacare on their whim, and contrary to the law, the Head of FEMA, the man in charge of administering the program, says he does not have the authority to delay implementation of the law or halt premium increases.

Keep giving up more of your lives to the Washington politicians and bureaucrats who know more about everything than you or your insurance company.


thats exaxtly what happened to me in flood plain zone, at the time it was not clear, when i bought the house, when my mortgage was sold, the new mortgage company did a investigation and required me to purchase flood insurance, at the time tho it was standard rate like $600.00 a year and had to be paid all at once, after reading this, a $150,000 house would cost $8000 a year, thats enough to scare anyone away

Real estate maven

Seems to me there are two issues. The first is there needs to be a fair, consistent definition of flood zone supported by science, fact and empirical data. In the Information Age this should not be an insurmountable challenge. Secondly, just in terms of fundamental fairness shouldn't a person living in a flood way pay more for insurance than someone who doesn't? it is not fair for the rules to change in the middle of the game and all of a sudden some government wonk decides today you live in a flood way but yesterday you didn't. But it also isn't fair for everyone else to subsidize the insurance cost for those who make a conscious decision to live in a flood way or those who weren't smart enough to figure this out before they purchased their house.


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