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Friday, Jun 22, 2018
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New flood insurance rates affect modest Hillsborough homes

TAMPA — Much of the pain of the new flood insurance rates will be borne by people in modest homes worth in the low $100,000s, not just those in waterfront mansions, new figures from the Hillsborough County Property Appraiser’s Office show.

Meantime, the same data suggest thousands of people who own investment or vacation homes in the county may be in for immediate sticker shock. These non-homesteaded properties already have lost their federal flood insurance rate subsidies, unlike homesteaded properties that will keep subsidies for the time being.

Local property appraisers are trying to get a handle on the effects of the national Biggert-Waters Flood Insurance Reform Act of 2012. The law will phase out artificially low insurance rates over several years to help make the National Flood Insurance Program more financially stable.

Few people, though, were prepared for the size of the insurance rate increases, and Congressmen from Florida and elsewhere are scrambling to repeal or delay the law’s implementation. For now, though, it’s the law of the land.

Last week, the Hillsborough County Property Appraiser’s Office estimated that the owners of some 20,000 single-family homes in the county are eligible for federal rate subsidies. They generally live in certain high-risk flood zones and have older homes that don’t comply with newer flood insurance rate maps created in the late 1970s and early 1980s.

Some of these 20,000 homeowners will start seeing new flood insurance rates that are dramatically higher.

This week, the Property Appraiser’s Office provided more detail on those homes. For example, their median size is about 1,500 square feet and their median assessed value is $102,867.

That low median value initially surprised Pat Alesandrini, director of valuation for the Property Appraiser’s Office.

“But when looking at this stuff, you’ve got these shot-gun houses that sit on lots not much bigger than the house is,” he said.

Finally, about 80 percent lack any kind of water frontage, whether the bay or a lake or river. The Pinellas County Property Appraiser did a similar study, also showing that many homes affected by the law in that county are modest, with values in the $130,000 range.

The new law has a complex set of rules that govern who will see rate increases and when. Some of those rate increases became effective Tuesday.

Especially spooking Realtors is the fact that people who buy affected homes will immediately lose those subsidies and pay “full-risk” insurance rates that could be hundreds or thousands of dollars more per year.

Also, unlike homesteaded properties, the owners of second homes actually lost their insurance rate subsidies in January and are already seeing skyrocketing rates. As many as 6,000 homes may face this situation, the Property Appraiser’s Office estimates.

Chad Redman, an insurance broker with Magna Rate Insurance in Dunedin, said he saw the owner of one local rental property come in recently. His rate shot up from $1,400 last year to about $3,000 this year, he said.

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