Pressure on (Flood Insurance) Premiums
Wait a second . . . didn’t Hurricane Sandy clobber the East Coast, not the Midwest?
And, wasn’t that, like, more than a year ago?
Yes, but . . . flood insurance premiums are set nationally.
In the wake (literally) of recent mega-storms like Sandy and Katrina, flood insurance premiums everywhere are on the rise, causing all kinds of fallout in faraway places like Minnesota.
Rivers & Lakes vs. Hurricanes
Minnesota doesn’t have hurricanes, but it does have lakes and rivers — notwithstanding the license plate (“Land of 10,000 Lakes”), the actual number of the former is well over 11,000.
When annual flood insurance premiums on an affected home are a relatively modest $1,000 or $1,500 annually . . . no big deal, at least for lots of Buyers.
That’s especially true if the home has an especially appealing water view.
However, when flood insurance premiums suddenly double or triple, as now appears possible, whether or not the home is subject to mandatory flood insurance suddenly matters A LOT.
Perhaps that’s why, starting this week (Wednesday, Jan. 1 in fact), the Minnesota Seller’s Disclosure has a beefed-up section on flood insurance, requiring Sellers to divulge what they know about the home’s flood zone classification, and telling prospective Buyers about any previous flood insurance claims.