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What you need to know about Flood Insurance in the Florida Keys

What you need to know about Flood Insurance in the Florida Keys

by | Sep 13, 2022 | Buyer Information, Insurance

When you are purchasing a home in the Florida Keys, one of the lender requirements is to obtain Flood Insurance.  The big question is how much does Flood Insurance Cost?  Well, there is no straight forward answer to this question as each house is unique. 

I will go over a little background information on flood insurance and talk to you about some of the experiences I have had recently. However, I am by no means an insurance agent, so please always consult with a local insurance agent. 

FEMA 2.0  – FEMA’s – NEW Risk Rating Methodology

What is FEMA 2.0? FEMA 2.0 is FEMA’s new risk rating Methodology.

Straight from the FEMA Website, FEMA States:

“FEMA is updating the National Flood Insurance Program‘s (NFIP) risk rating methodology through the implementation of a new pricing methodology called Risk Rating 2.0. The methodology leverages industry best practices and cutting-edge technology to enable FEMA to deliver rates that are actuarily sound, equitable, easier to understand and better reflect a property’s flood risk.”

FEMA 2.0 is in full effect. 

Now I can tell you from personal experience, FEMA 2.0 is not fair or equitable here in the Florida Keys.  FEMA 2.0 has caused Flood insurance to increase in almost every home. 

FEMA 2.0 and NEW Construction

On a new construction home that is elevated above flood, not just inches but several feet, new insurance policy premiums have been quoted between $4,000 – $5,000 dollars a year.  Before FEMA 2.0, an owner would get a benefit to building a home above flood.  Flood Quotes would be much more reasonable around $800.00 to $900.00 a year.   FEMA 2.0 has changed that.  There seems to be no rhyme or reason as to how FEMA is coming up with these premiums.

FEMA 2.0 – OWNERS that have Insurance Already

If you are an owner and you already have insurance, did you take a closer look at your insurance premium? Most homeowners experienced an increase of either 18 percent or 25 percent. If your home is a primary residence then you would see an increase of 18 percent. If the property is a 2nd home, then you would have experienced an increase of 25 percent.

FEMA 2.0 – My Flood Insurance is CRAZY

With the implantation of FEMA 2.0 – the Florida Keys are fighting back.  Our local organization, FIRM -Fair Insurance Rates in Monroe County, are working hard to help ensure fair rates.  If you have a crazy insurance premium and would like to share, FIRM is building a database to see how premiums are affecting owners and will share the database with Members of Congress. This is a fantastic organization to sponsor and follow for updated info on insurance.  Follow the link for more info on FIRM.

Do Get an Elevation Certificate

When getting a Flood Insurance quote, the insurance agent will often ask for an elevation certificate. An elevation certificate will show you the lowest point of elevation on a home. Local survey companies can provide you with an elevation certificate for a cost. Insurance agents use the certificate to help with the calculation of your premium. In most instances, having an elevation will lower your flood premium.

Differences in Rates

If you are going to use your home as your primary residence, your insurance premium will be lowered compared to if you use the home as an investment or second home.

Flood Insurance Tip for Seller’s in the Florida Keys

If you have flood insurance KEEP IT. Often in the Florida Keys, we have owners that like to self-insure. These are owners who do not have a mortgage and own the home out right. A lot of owners feel as if they are paying the insurance company too much for what they will ever get out of it. I understand this philosophy and in some instance that could be the best option for someone. However, when you elect to self-insure and not carry any flood insurance, when you go to sell, the new buyer will have to obtain a brand new flood policy if they are seeking a mortgage. The cost of a new policy can be very high and result in the buyer being unable to afford the home. Overall, it can decreases your buyer pool.

Flood Insurance Tip for Buyers in the Florida Keys

As a buyer, one of the easiest ways to save money on flood insurance is to assume the Seller’s policy. Flood insurance is the only insurance that can be assumed. Wind and Homeowners cannot be assumed. The buyer saves money by assuming the flood insurance because often the cost of a new policy is greater than the current sellers rate. The process for assuming the flood is easy but can take a little bit of time, so don’t wait until the last minute before closing to get the essential paperwork completed.

Although, I can’t exactly tell you how much your Flood insurance will be, hopefully you have a better understanding of flood insurance in the Flood Keys and always call your insurance agent.

Also remember, the new flood maps are coming out sometime soon!

Local Insurance Agents:

Regan Roth

Insurance Office of America 

Are there Homeowners Associations in the Florida Keys? -Learn More

Are there Homeowners Associations in the Florida Keys? -Learn More

by | Sep 12, 2022 | Buyer Information

Homeowners Association for single family homes are few and in between in the Florida Keys. Typically, if a neighborhood has a Homeowners Association, it is voluntary. The average cost of an HOA in the Florida Keys is around $200.00 – $300.00 yearly.

Although there are a limited number of HOA’s in the Florida Keys, when a neighborhood does have them, they often offer you access to a beach, picnic area, and boat ramp! Which is pretty awesome if you don’t own a home on the water.  

Need to Know – Property Taxes in Monroe County, FL

Need to Know – Property Taxes in Monroe County, FL

by | Sep 12, 2022 | Buyer Information

Monroe County has the lowest property taxes in Florida!

As a buyer, you can expect to pay about 1 percent of the purchase price.

For example, if you purchase a home for $400,000, property taxes will be about 4,000 dollars a year. The actual amount will be a little less, but to keep it simple, we estimate 1 percent.

Often as a buyer, you will see the property listed with the current owner’s tax rate. YOUR taxes will be different, so don’t use the current seller’s rate in your estimates!

Don’t forget to homestead your property for more tax benefits. 

Helpful Links

Monroe County Tax Collector’s Office

Breaking Down Flood Maps in the Florida Keys

Breaking Down Flood Maps in the Florida Keys

by | Sep 10, 2022 | Building in the Florida Keys, Buyer Information, Insurance

Flood Maps in the Florida Keys, can be a bit confusing.  So I am going to break it down for you to make it as simple as possible.

So lets get one thing straight, basically everywhere in the Florida Keys is in a Flood Zone. I know some of you are going to come at me and say there are X-ZONES. X-ZONES mean that the probability of Flooding is very rare. However, a lot of the X-Zones are going away once the New Flood Maps are implemented.

FEMA is currently working on updating their Flood Maps for Monroe County. The Draft Flood Maps for Monroe county can be found by following this link.  About two years ago the county showed the public the drafts maps; then there was a period where homeowners could appeal the changes.  We are currently waiting for the new maps to be set.  Although the draft maps are just a draft, it is best to check them out so you can know what to expect.

There are two Flood Zones.  AE and VE

According to FEMA:

Zone AE: An area inundated by 1% annual chance flooding, for which Base Flood Elevations have been determined.

Zone VE: An area inundated by 1% annual chance flooding with velocity hazard (wave action) for which Base Flood Elevations have been determined.

We like to refer to Flood Zone VE  – as Very Expensive in terms of Flood insurance.   These zones tend to be near the open water.

On the New Flood Maps,  FEMA is introducing and area called, Coastal A Zones.  This is shown on the draft maps as a black line with little triangles.    This line is referred to as the Limit of Moderate Wave Action (LiMWA).

These areas are still considered AE however, FEMA is stating that these areas are more likely to experience higher wave action.  See image below.  

FEMA Coastal A

Since the Coastal A-Zones, are more likely to experience wave action, FEMA is recommending that these areas be built to VE Standards.  The city or county will have to adopt these recommendations. but it is highly likely that they will as they want the homeowners to obtain good insurance rates and maintain good CRS rating (Community Rating System)

Be on the look out, if your Flood Zone is changing from an AE Zone to a VE Zone, the cost of Flood Insurance is going to go up.

Flood Elevation – NEW Flood Maps

Not only are the Flood Zones changing, but also the Elevations. The new maps will be implementing FEMA’s new mapping standard called, NAVD88. With the new mapping standard, there is a difference in elevation of approximately one and a half feet.

Read Below from the Monroe County Website:

To account for this change, ON AVERAGE you should add +1.5 foot to any apparent increase. For example, if your building was in an AE-8 flood zone and is still shown in an AE-8 zone, then it actually experienced an increase of 1.5 feet. Another example, if your building was in an AE-6 flood zone and is proposed to be in an AE-9 zone, the increase appears to be three-feet.  However, the actual increase would be 4.5 feet.”

There are a lot of homes that are just above flood.  I am talking about 2-3 inches.  Once the new maps are implemented they will be, below flood.

New Construction Homes

I really have no idea why I keep seeing this happen. All over the Florida Keys, contractors are building ground-level homes that are above flood for today’s standards, but very shortly these homes will be below flood. The NEW maps will be put into place soon. If you are going to build NEW, consult with your contractor and make sure your home is above flood with the new standard! I know we all hate stairs, but going up just a little more is a whole lot easier than repairing an entire house. 

Additional Resources:

Monroe County Draft Maps 

FEMA

Prumo & Carden Team

Amy is a highly accomplished and esteemed Florida Keys Elite Agent and Diamond Award Winner, boasting an illustrious career spanning over 13 years in the real estate industry. Her expertise extends beyond real estate, with a background in marketing and sales strategy development, showcasing her versatility and business acumen.

Tom is an exceptional professional with extensive experience in the Building, Planning, Zoning, and Development field. Having served in the Civil Engineering Department for the USAF and holding the position of Building Official/Director of Building Planning and Zoning for a municipality for over a decade, he is widely recognized for his expertise and leadership.

Amy Prumo & Thomas Carden
Coldwell Banker Schmitt Real Estate