Real estate investors who have properties in areas requiring flood insurance need to know about changes in the law that went into effect on April 1, 2015. ROI and cash flow considerations make keeping up with cost increases important.
Changes in the law will result in some homeowners seeing premium increases of between 15% and 18%. Rental properties already have a different coverage level from a primary residence.
This is particularly painful the first year when escrow must collect an entire first year premium plus start building escrow for the next year’s coverage.
Commercial and Investement Properties and 2nd homes will also see a yearly $250 surcharge on their flood bills.