Higher rates for Lake Minnetonka flood insurance under the National Flood Insurance Program took effect on April 1st. The increase hiked individual policy premiums for homeowners in high-risk areas by as much as 25 percent.
The Homeowner Flood Insurance Affordability Act of 2014 carries some premium increases of up to 18 percent for primary homeowners and 25 percent for owners of vacation homes or rental properties. A new surcharge will also be assessed.
Most homeowners' insurance policies don't cover flood damage, although many cover natural disasters such as hurricanes, with the most expensive policies tied to coastal properties that are most vulnerable to storm damage.
Most consumers in designated low-lying zones must buy special coverage to add protection against floods. The average premium for Lake Minnetonka flood insurance is $650 a year, according to the federal flood insurance program.
Lake Minnetonka Flood Insurance Isn't Mandatory
Lake Minnetonka flood insurance isn't mandatory in most cases, especially if you own your home outright. But homes and businesses in flood-prone areas are required to have flood insurance to qualify for federally insured mortgages. Essentially, this means that flood protection is needed by a majority of homeowners.
Although Lake Minnetonka flood insurance is not mandatory, like, with windstorm coverage, flood insurance rates for some properties in high-risk areas can be much higher. About 5.2 million Americans carry flood insurance policies. The premium increases are estimated to affect about one million of these homeowners according to a spokesman for the Federal Emergency Management Agency, which administers the flood program.
Because of massive hurricane damage, from Katrina, Sandy, and other destructive events — the flood insurance program has racked up billions of dollars in debt. But last year's Homeowner Flood Insurance Affordability Act (HFIAA) eases the impact of rate increases for many policyholders.
In passing HFIAA, Congress rolled back price hikes called for under previous legislation, the Biggert-Waters Flood Insurance Reform Act of 2012, after coastal property owners, state lawmakers, and real estate interests complained.
Find more articles as they relate to Lake Minnetonka flood insurance under our Lake Minnetonka Insurance section of articles to your right under Lake Minnetonka Real Estate Categories.
