Another fiscal cliff

Once again we see the infighting in Congress delaying decisions on the budget that could lead to a shut down. This is increasingly becoming a non-event to many since no one is convinced that our dysfunctional lawmakers will actually take us to bankruptcy. One of the many threats of inaction though is the loss of federally backed flood insurance.

The National Association of Realtors (NAR) has lobbied successfully to keep this Federal Emergency Management Agency (FEMA) backed flood insurance program funded time and again. The NAR's last successful attempt to renew the program though, resulted in a compromise that contained a phaseout of subsidies that lower insurance premiums for some property owners.

The subsidy phaseout was enacted into law last year as part of major flood insurance reform legislation called the "Biggert-Waters Flood Insurance Act" which helped bring much-needed stability to the program by reauthorizing flood insurance for five years. But the law also instituted reforms to make the program more financially sound, and as a part of that financial restructuring that Congress included the phaseout of insurance premium subsidies for a small portion of homes and businesses. As a result of the phase-out, some owners will see their share of flood insurance premiums go up starting next month, which is the start of the next federal fiscal year.

For years, a small portion of property owners have been paying far below the actuarial cost of their policies because of previous legislation. In some cases, the premium subsidies were for properties that were in areas in which outdated flood maps had been grandfathered. In other cases, the subsidies were for properties that pre-date the drawing of their area flood maps. Updated FEMA flood maps show new areas that, according to FEMA, are at risk for flooding which puts some properties previously thought to be safe from flooding at risk and therefore require the owners to provide flood insurance. No one can be expected to like seeing their subsidies phased out, but for supporters of reform, it was either that or not having any flood insurance available at all.

For some Coeur d'Alene property owners that subsidy loss could increase the sticker shock they will experience should the Corps of Engineers determine that the dike that protects the Fort Grounds - with its seawall installed - is not sufficient to protect those properties from flooding. In all cases where flood insurance is required, it can have an impact on resale value of those homes. Many who enjoy waterfront homes consider their flood insurance as a part of the price to pay for the privilege of waterfront living. Folks who do not have waterfront properties, many of whom never see the waterfront from their property, are still dependent on FEMA's assistance for their insurance. These folks properties lie in the 100-year flood zone.

If you want to know if your property falls within a flood zone, even though it may not have been designated as such when you bought it, you can look at the flood zone maps at FEMA's website; www.fema.gov, type "flood maps" into the search bar there and it will allow you to enter your ZIP code to see a map of that area, showing the flood risk zones.

In the meantime, NAR recommends agents, if they're working with buyers or sellers of property in a flood area or an area that might be in a flood zone to let clients know that insurance subsidies could be phasing out, thereby increasing the costs to owners for flood insurance.

Trust an expert...call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.

Kim Cooper is a real estate broker and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664.