6 facts about Flood Insurance in Bradenton and Anna Maria Island

1.) Is the property a Firm or pre-firm property?

Pre-FIRM: Buildings constructed before the community’s first FIRM. Communities might not have elevation
information on file for these (older) properties. For most of Manatee County this is around 1971.

So “pre-Firm” is built before 1971. Everything else is “Firm”.

2.) Flood Zone

You can check your flood zone at the Manatee GIS. (you need to click “FEMA Flood” on the left side)

3.) Elevation Certificate (EC)

If your property is within a regulated Flood Zone (A, AE, V, VE, basically everything except X) and you are Firm (i.e. built after 1971 for MC), then you need an EC for an adequate Flood Quote.

4.) How FEDs messed it up

Before 1950 flood insurance was part of the standard homeowners’ insurance policy. During the 1950s increasingly high correlation of losses by holders of flood policies of the same company caused many insurance companies to begin excluding flood coverage from standard insurance policies, selling flood insurance separately. Over time, insurance premiums collected were insufficient in covering payouts after major flooding events. In the 1960s flood insurance became completely unprofitable and private companies no longer offered flood insurance policies. This meant that the costs of floods were borne by property owners, many of which could not afford such high disaster costs. The government provided public disaster aid to affected property owners.

Lobbying in the 1950 and 60s

Government Flood insurance (NFIP) has been enacted 1968 due to a lack of private insurers. Participation in the NFIP is based on an agreement between local communities and the federal government. This agreement states that if a community will adopt and enforce a floodplain management ordinance to reduce future flood risks to new construction in Special Flood Hazard Areas (SFHA).

How did they make communities follow these rules?

If communities follow that rule, the federal government will make flood insurance available within the community as a financial protection against flood losses. Unfortunately, over time, rates have skyrocketed despite these rules due to errors in the risk estimation for many areas, not necessarily prone to flooding.

The secondary mortgage market (where banks sell your mortgages after a few months) was dominated by the FEDs as well (Freddie, Fannie, VA). So they simply regulated: No Flood insurance, no mortgage.

Remember: Government is not for you, it is for those lobbying them.

Fema prohibits discounts from Flood insurance companies to customers

Since Flood insurance rates have been regulated by FEMA for some decades, some private insurance companies who sold government Flood insurance began offering discounts paid with their commission to customers. Under President Obama, this procedure was prohibited by FEMA. Again the FEDs worked to the disadvantage of the customer.

The Biggert–Waters Flood Insurance Reform Act of 2012 (Biggert-Waters) modified the NFIP. A core principle of Biggert-Waters was to change the NFIP premiums to match actuarial risk-based premiums that better reflected the expected losses and the real risk of flooding. These changes included removing discounts to many policies and eliminating “grandfathering” of older rates.

Feds think they are smarter than reality – untrue

Since the new rates were simply unaffordable and the ongoing housing crisis, a fix needed to be found since people and taxpayers became outrageous.

In January 2014, the United States Senate passed the Homeowner Flood Insurance Affordability Act of 2014 (S. 1926; 113th Congress). This bill changed the process used to alter subsidized premiums and reinstated grandfathering of lower rates; effectively delaying the increases in flood insurance premiums to obtain risk-based premiums under Biggert-Waters and spreading the cost of the lost premiums over all of the remaining policy holders.


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Sea to Sky Realty

The Florida Real Estate Company with the GERMAN Twist!
Axel and Bea Weiss
Bradenton, Florida 34205
(941) 866 1666