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Message: <blockquote data-quote="Allen" data-source="post: 420569" data-attributes="member: 389">Flood insurance went through a number of changes over the past 10-15 years.  Back then Congress stated they wanted to get out of the business of subsidizing flood insurance policies and that the insured were to start paying the actuarial cost of insuring said property.  In general, I would think most on here would agree with that philosophy, but then reality set in.  Homeowners, especially on the east coast where hurricanes are common, lost their ever-loving minds.  Insurance rates didn't just double or triple, some went up by 1,000 percent, or more.  When you think about it and look at the Outer Banks of NC, or the Keys down in Florida, there are neighborhoods that have been in existence for a century, but almost every house is less than 30 years old and valued at $500-800k.  This would suggest the actuarial cost of buying insurance for some of those homes to be in the range of $20,000 per year.  This absolutely killed the housing market for many of those homes.So, Congress rethought their plan of full actuarial cost and came up with something that basically grandfathered in the existing owners.  However, as they sell those homes, the next owner had to start paying a larger fraction of the actuarial cost of insurance until such time as the 3rd, 4th, or maybe 5th time the place is sold they are supposed to be paying full actuarial cost.  Again, at least that was the plan.I stopped really paying close attention to flood insurance a number of years ago because the rules were constantly changing, and well...I don't need it.  Nonetheless, I know they continue to modify the rules with each passing of the authorization for federally subsidized flood insurance.  Not sure when they added the Excessive Loss Property (XLP) section, but basically any property that reaches four claims of $10,000...that property is no longer eligible for federal flood insurance and they would have to go out on the open market for it (which definitely means they will be paying full actuarial cost).I'm not necessarily a Suze Orman fan, but just recently caught an article where she was quoted as saying anyone who can financially do so, should self-insure (at least on flood insurance) and she was going to do exactly that.  Reason being, her flood insurance on a Florida beach condo (not sure of its value) had reached $28,000 per year, so she went the self-insured route. Anyway, I personally wouldn't own a place that is located in a flood zone.  When you think about it, if you're in a 100 yr flood plain (1% chance of flooding in any given year) and plan on living there for the next 33 years, there's a 1 in 3 chance during your time there that you will have to deal with a wet house.  I lived in GF during 1997 and helped rehab a good number of flooded homes.  Owning a wet home is just a big fat NO for me. I've written enough, but if you are ever to consider buying a place where flood insurance is either mandated (or just a good idea), do yourself a favor and make darn sure you become an expert on the topic.  Lots of people get things wet only to then be very disappointed in their flood insurance policy.<a href="http://national%20flood%20insurance%20program/" target="_blank">National Flood Insurance Program</a></blockquote>

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