Although the memory of Super Storm Sandy seems like a distant memory that many of us may prefer to forget, there are still reminders of its devastation throughout the New York metro-area. Some unfortunate few are still displaced from their homes, while others rebuild; Governor Christie insists we’re Stronger Than the Storm and on Memorial Day Weekend the crowded beaches of the Jersey Shore proved that just may be true.
However, some less tangible effects of the storm are still yet to be seen in the real estate market but will deliver a powerful punch nonetheless. Take for example flood insurance. Changes enacted under the Flood Insurance Reform Act signed into law last summer, are expected to double premiums over the next few years. In addition, the Federal Emergency Management Administration is currently re-evaluating flood maps, requiring more jumbo-mortgage holders with homes in high-hazard areas to buy flood insurance. To this end, although flood coverage is only mandated for government-backed mortgages, some banks are also requiring jumbo-mortgage borrowers to obtain maximum coverage available for residential properties under the National Flood Insurance Program.
All this to say, the percentage of homer owners required to pay flood insurance has significantly increased while luxury homeowners are purchasing excess insurance all at the same time that premiums are at their highest. And while Sandy brought attention to coastal areas as high-risk, properties located near rivers, lakes and creeks may also now be deemed in a similar risk category.
When rebuilding, relocating or simply purchasing, keep these new requirements and FEMA standards in mind. An experienced real estate attorney and loan professionals can also help you navigate the process to ensure that you and your assets are properly covered. For more information, please contact Felix Nihamin & Associates, P.C. at 212-502-4868 ext. 302.