Flood Insurance

An important aspect of the purchase of a home at the shore is the Flood Insurance requirement. Since 1968 the National Flood Insurance Program (NFIP) has been providing protection to homes in 20,000 communities throughout the nation. During the 1970s the program became a regular requirement by mortgage lending institutions and by the 1990s Federal Regulations required all banks to maintain evidence of Flood Insurance Coverage on their lending portfolio or face large fines.

The maximum NFIP coverage limit for Flood Damage is $250,000 with a standard deductible of $2,000. The Flood Insurance Rate Map (FIRM) for an area delineates the boundaries and probability of flooding within a 100-year span. Rates are set by the historic probability of flooding based on elevation with the benchmark for all properties being its Base Flood Elevation (BFE) and the age of the home.

When shopping for a home at the shore, a crucial financial consideration is the annual cost of Flood Insurance. New homes constructed to levels above the BFE receive the lowest rates, those that were constructed prior to the current maps and below the BFE are charged considerably more. As an example, a typical new home offered by Shore Premium Homes will have an annual charge of $510 while another home constructed prior to the current map could have a cost of $7,400. That annual difference of $6,890 if used for a mortgage payment translates to over $121,000 in purchasing ability and could provide for an additional annual income tax deduction of $4,840. Recent changes in the laws governing the NFIP lowered the annual increase on premiums for pre-FIRM homes to 18% rather than the previously mandated 25%, even with this easing, current annual premiums on older homes are likely to double in less than 5 years.

All homes offered by Shore Premium Homes are designed to sustain wind, rain and high-water hazards, are constructed of materials that exceed Federal Requirements, offer both beauty and sustainable functionality and will provide safety and joy for over a lifetime.

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