Jersey Shore to Benefit from Federal Bill [AUDIO]
President Barack Obama is expected to sign the federal Homeowners Flood Insurance Affordability Act into law within the next 10 days, which would benefit Jersey Shore residents still recovering from Superstorm Sandy, according to an insurance expert in Ocean County.
Changes in the bill would grandfather in older homes under previous lower rates, said Michael Hill, president of The John Hill Agency in Bayville.
"Typically these are homes in our area which were built before the early '80s-late '70s, which have not been elevated to meet the current flood codes," Hill said.
Residents of older homes would not be hit with newer, actuarial rates.
"They were going to have to pay these new actuarial rates which were anywhere from $8,000 to $10,000 more than what they were paying," Hill said.
He said that was affecting the market value of older homes and new buyers interested in older homes. People trying to sell older homes in flood zones were faced with passing on the new insurance costs to buyers.
"The new buyer coming in will still be able to pay the grandfathered rates, which are drastically lower," Hill said.
Buyers looking at properties now could see higher prices, Hill predicted, because the grim story of the flood insurance rates is changing and getting better.
Hill said current primary homeowners will get a little relief.
"There is still going to be anywhere from 18 to 25 percent annual increases in flood insurance rates," he said.
In the past, those increases were going to be much lower and more gradual if people were keeping the home they're living in.
"However, now they're going to be up to 25 percent, I believe, for secondary homeowners and 18 percent for primary homeowners," Hill said.
Hill said insurance companies don't know what the effective dates are yet. He expects once the bill is approved, it will take some time for the National Flood Program to actually change all the manuals and reprogram all of their computer systems.