FLOOD INSURANCE UPDATE and Hilton Head Island Homeowners July 2014
Want to search for homes on higher ground? (and obviously this comes with the disclaimer that you must investigate through Beaufort County or request an elevation certificate - though I do many things, being a Surveyor is not one of them)
WHAT IS THE NEWEST UPDATE?
I hate to say it, but this is meant to be a summary and an encouragement to check with your insurance agent if you're a current Hilton Head homeowner, and if you're thinking of buying, check with a local insurance agent to confirm the effects of the legislation. And, as with all insurance quotes, please be sure that you understand that all the numbers below are estimates, and this is for informational purposes only - and of course this is as of the date of this post.
Finally, the information below comes from a local agent who has kindly put this together and it is relevant to Pre-Firm Homes.
WHAT DOES PRE OR POST-FIRM MEAN - WHAT'S 'FIRM'
FIRM is an acronym that stands for "Flood Insurance Rate Map." The best source of anything and everything flood related may be found at the FEMA website - not light reading but very helpful. With all of the legislation and changes due to the original Biggert-Waters Act.
The applicable date of the map is different throughout the country and even different throughout states, individual counties, and in fact, individual cities/towns. In the case of Hilton Head Island, a residence is determined to be pre-FIRM if it was built prior to September 1977. These Flood Insurance Rate Maps are also related to when a Town was incorporated and when the information was available.
If your PRIMARY RESIDENCE is Pre-Firm, the premium for Year 1 will be:
$2711.00 with a $2,000 deductible on the structure and $2,000 deductible on contents
$2170.00 with a $5,000 deductible on the structure and $5,000 deductible on contents
(Rates will increase by 5-15% annually until the property reaches full risk rate. Most likely anticipated annual increase will be 10%)
If this is a Second Home and Pre-Firm, premium for Year 1 will be:
$3437.00 with a $2,000 deductible on the structure and $2,000 deductible on contents
$2800 with a $5,000 deductible on the structure and a $5,000 deductible on contents
(Rates will increase by 25% annually until the property reaches full risk rate)
WHAT ARE THESE FULL RISK RATES (Please note: these are based on a $5,000 deductible)
1 foot below flood elevation - $3400
2 feet below flood elevation - $4200
3 feet below flood elevation - $5400
4 feet below flood elevation - $6600
5 feet below flood elevation - $8000
Note - the baseline flood elevation required for Hilton Head Island is 14 feet
WHAT CAN YOU DO?
You should be speaking with your insurance company and before every renewal and before our hurricane season, be sure that you are aware of your current coverage, what your lender requires (if that is applicable). If you do not have financing and own your home with no encumbrances, and have never carried flood insurance, check with your carrier relative to the ramifications on the basis of the new legislation and the ramifications for a successful sale and pricing.
Check to see whether you have an elevation certificate and if not, think about securing one. This will be the only means by which you may prove to your insurance company your elevation; otherwise, the rates will continue to rise and could potentially go beyond the highest rate.
Be proactive; you may affect your rate by installing hydrostatic vents. There are other manufacturers but the prime purpose of these vents is to allow water to flow freely without impacting the structural integrity of the structure.
If you are purchasing a home, use a Realtor(R) who is local and has information or can guide you to where to find the information relative to this issue. Most local real estate firms have addenda dealing with the request for the seller to provide an elevation certificate.
Do your own homework; if you are considering purchasing a home either on the water or near the water, go to the Beaufort County website to look up the GIS mapping. It has loads of valuable information. Whether or not you are financing, contact a local insurance agent and ask them about the various options.
Consider purchasing a homesite on Hilton Head instead and make the comparison in cost and timesince you'll be building at least at the required flood stage.
How about a homesite on the mainland or in one of the fabulous golf course communities in Bluffton? The homesite prices are still terrific!
A final comment: in my role as a member of the South Carolina Association of Realtors Legislative Committee, we are working diligently at the State as well as a national level through the National Association of Realtors to continue to bring this issue to the attention of legislators so that we may represent our customers and clients and their needs.