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Flood Insurance Rates Going Up? Here’s What to Do

Flood Insurance Rates Going Up? Here’s What to Do

by | Oct 21, 2014 | Homeownership, Insurance

Why Are Rates Going Up?

Two reasons:

1. The Federal Emergency Management Agency is updating its flood maps to be more accurate, which could change your flood risk designation. If your risk is higher, your premiums will go up. If it’s lower, your premiums could go down.

2. Last year, a new law took effect that requires the National Flood Insurance Program (NFIP) to phase out subsidies for some older properties to reflect the full risk of flooding.

Phasing out the subsidized rates and discounts over the next five years will help the NFIP stay solvent.

Some subsidies have been given in the form of “grandfathering.” A grandfathered rate is a discount given to homes built in compliance with then-existing standards in a flood-mapped community where the flood risk has since increased.

Congress and FEMA are reviewing these properties to determine whether to phase out these grandfathered rates. FEMA won’t make a decision on this until late 2014. By then, Congress could pass a law delaying the increase indefinitely.

Do You Have a Subsidized or Discounted Rate?

Only 20% of NFIP policies are subsidized. Most hom eowners already pay the full rate and won’t see an increase.

If your property isn’t your principal residence, is in a special flood hazard area, and was built before the first flood insurance rate map was implemented for your community, you may be getting a subsidy for being what’s called Pre-FIRM (pre-flood-insurance-rate-map).

TIP: To find out if your home is Pre-FIRM, look up your area in the Federal Emergency Management Agency’s (FEMA’s) Community Book.

1. Click your state.

2. Look for the date in the “Init FIRM Identified” column for your area.

If your home was built before that date and it’s in a special hazard zone, you probably have subsidized flood insurance.

If Your Premiums Aren’t Subsidized or Discounted It’s possible you still could see a change in your flood insurance premiums if your home is in a community that adopts a revised flood map after July 6, 2012. If that revised flood map puts you in a different zone, your rates could go up or down.

When Will the Rate Changes Take Effect?

If your home is Pre-FIRM and it’s a second home (rental or vacation), you may already have seen your rates change. A 25% increase was implemented for policies renewing after Jan. 1, 2013. Increases will continue each year until they reach full-risk rates.

In October 2013, more subsidized homes will start seeing rate increases of 25% each year:

  • Severe repetitive loss properties
  • Business properties
  • Properties with previous flood claims for more than the market value of the property

If you have a Pre-FIRM home, and it’s your primary home, and it doesn’t fall into the above-mentioned categories, (lucky you!) you get to keep your subsidized rate until:

  • You sell your home.
  • You let your policy lapse.
  • You have severe, repeated flood losses.
  • You buy a new policy.

Can You Get a Better Rate?

You may be able to get a lower flood insurance rate by changing your home’s flood risk. Congress appropriated a large sum of money for property owners to raise their homes onto piers, posts, columns, or pilings. Check with your local community to see if grant money is available to help you do that. Talk to your insurance agent about how elevating your house will change your flood insurance premium.

There’s also a Community Rating System that could reduce flood insurance rates by up to 45%, depending on which flood plain management regulations your community adopts.

Check with your local officials or insurance company to see if your community participates and if you can get a discount for that. If your community doesn’t participate, write a letter to local officials urging them to join the Community Rating System.

Other things you can do to trim your flood insurance premiums:

  • Opt for a higher deductible on your excess insurance policy if you have one.
  • Convince local officials to put more money into community flood mitigation projects to lower your flood risk.

It won’t lower your premium, but having a flood cleanup kit on hand will make your life easier if you do have a flood.

By the way, NFIP is the best deal. Without it, you have to take your chances in a virtually nonexistent private market for flood insurance at rates only the wealthy can afford.

Some of the same companies that provide private flood coverage also sell “excess coverage” flood insurance. Excess coverage pays to rebuild homes valued at more than the NFIP limit of $250,000.

Mistakes in Flood Insurance Premiums

It’s possible the rate you’re quoted for flood insurance is wrong. If you disagree about whether your home is in a particular flood zone or the insurer didn’t take into account the pilings that raise your home 12 feet in the air, you can appeal your home’s flood zone determination.

An elevation certificate from a surveyor or engineer can lower your premium if it proves your home sits above the predicted flood level.

You’ll also want to correct insurer mistakes that lower your premium. For example, if your policy says your home doesn’t have an elevator or crawlspace and it does, tell your agent, even if your premium will rise when those are included. That ensures your property and possessions are fully covered and recoup what you’re owed.

Think the FEMA map itself is wrong? Check with local zoning officials, your builder, prior owners, a local surveyor, and FEMA to see if anyone has filed a Letter of Map Amendment asking for a map review.

If no one has filed, you can do your own appeal.

 

 

Source: By: Dona DeZube; © Copyright 2014 NATIONAL ASSOCIATION OF REALTORS®

 

10 Green Improvements for Under $100 Each

10 Green Improvements for Under $100 Each

by | Oct 21, 2014 | Green Living, Homeownership, renovations

1. Seal switches and outlets with insulating foam gaskets.

Believe it or not, your electrical wall outlets and switches are drafty: You lose plenty of indoor air through sockets and switches located on exterior walls of your house. But there’s an ultra-cheap fix for this: Pre-cut insulating foam gaskets sell for less than a buck, and installation is an easy DIY job — all you’ll need is a screwdriver.

Turn off the power to the socket or switch you’ll be working on, then remove the faceplate with the screwdriver. Place the gasket on the inside of the faceplate. Then screw the faceplate back into the socket and voila — energy savings are yours.

 

2. Trim grocery bills with a vegetable garden.

 

Vegetables grown in your own backyard are great for making delicious and healthy meals, but they’ll save money on your grocery bills, too. About $80 worth of seeds and soil will yield almost $250 worth of fresh produce. Tomatoes, cucumbers, green beans, and peppers are especially prolific, yielding plenty of veggies to keep you away from the produce aisle.

Heirloom tomatoes will save you $15-$23 per year over store-bought tomatoes, and the plants cost next to nothing, especially if you start from seeds indoors.

 

3. Seal out drafts with thermally lined drapes.

 

Window coverings are a nice touch of décor, and they’re handy in saving energy, too. Drapes with an insulating thermal layer block icy drafts in the winter and prevent heat loss out windows.

Floor-to-ceiling fabric works best, especially if it folds back against the wall. This keeps drafts trapped behind the curtain instead of seeping into your rooms.

A 52-by-84-inch pair of thermally lined drapes costs less than $70, depending on brand and type of material. And your options aren’t limited — all sorts of colors and patterns are available.

 

4. Stop air leaks with weatherstripping.

Even the most sophisticated, energy-efficient heating and cooling system can’t keep you cozy when air slips through cracks under doors and around windows. Air leaks make your HVAC work harder than necessary to keep your home comfortable. A simple remedy? Seal out drafts with weatherstripping.

  • Bronze weatherstripping is good for windows. It lasts for decades, and is just $16 for 17 feet.
  • Adhesive-backed EPDM rubber is less expensive and will last at least 10 years.
  • Self-stick plastic weatherstripping is the same price and easy to install, but doesn’t last as long.
  • Adhesive-backed foam and felt are good choices for sealing for doors. Door weatherstripping gets a lot of use; if it comes loose, hold it in place with staples.

5. Trim energy use with a programmable thermostat.

It’s nice to be cozy, but why spend the money to keep your house at the perfect temperature when you’re not even home to enjoy it? A programmable thermostat lets you set various temperatures for different times of day. The easy setup can save you as much as $180 per year.

You can install a basic programmable thermostat yourself in less than an hour. You can spend a few hundred dollars, but you’ll find basic models with an LED touchscreen for $80.

 

6. Capture free water with a rain barrel.

It costs about $150 per month to irrigate a 100-by-100-foot lawn in the summertime. So when water falls from the sky for free, why not save it for use later? Rain barrels collect the rainwater that falls off your roof — an inch of rain falling on an average-size roof equals about 500 gallons of water. Rain barrels lower water bills by an average of $35 per month in the summer; plus, you’ll save about 1,300 gallons of water per year.

Commercial barrels cost as low as $50, or you can make one yourself for much less.

 

7. Get free fertilizer from a compost bin.

Food waste, lawn trimmings, dead leaves — they’re not trash, they’re valuable nutrients for your garden. Turn leftovers and yard waste into compost: A rich organic matter that helps plants grow. You’ll keep waste out of landfills; plus, your plants will need less water and fertilizer. Even better: it’s free!

There are a few different ways to start a compost pile — open piles are good for lawn trimmings, while an enclosed bin or tumbler works better for food waste.

The price of compost bins depend on size and type, but there are plenty of models on the market for under $100. This 65-gallon bin is just $60.

By the way, if you’re moving, don’t leave your compost behind; take your compost with you!

 

8. Save water with a dual-flush toilet converter.

Dual-flush toilets cost upwards of $300, but for just over $20, you can install a dual-flush converter that’ll replace the lever on your toilet with a two-button option — little button for liquids, big button for solids. The retrofit will help you save as much as 20 gallons of water per day compared with traditional toilets. Installation is an easy DIY job that’ll take only 20 minutes.

 

9. Outsmart energy loss with a smart power strip.

Even when they’re turned off, appliances can suck energy when they’re plugged in. Standby power consumption robs an average household of about $100 per year in energy costs. Unplug appliances when not in use by flipping the switch on your power strip.
Some devices, such as your DVR, have to stay on all the time to do their job. Smart power strips are the solution — you can unplug your TV when it’s not in use, while leaving the DVR on. Some strips have smart outlets that let you plug in rechargeable devices but automatically power down when the item is charged.

Smart power strips cost between $20 and $40.

 

10. Cool down with a ceiling fan.

In the summer, you can lower the perceived temperature of a room by 8 degrees just by turning on the ceiling fan. It won’t actually cool the room, but the moving air on your skin will make you feel cooler.

Ceiling fans cost barely more than a light bulb to operate, so they won’t be much of a drain on your energy usage, either. While you can pay up to $600 or so for a fan, there are plenty of ceiling fans for under $100.

 

Source: Courtney Craig; © Copyright 2014 NATIONAL ASSOCIATION OF REALTORS®

 

7 Steps to a Stress-Free Home Closing

7 Steps to a Stress-Free Home Closing

by | Oct 16, 2014 | Buying, Homeownership, Real Estate, Selling

Simple Steps to a Stress Free Home Closing

This cheat sheet helps you do your homework, so you know what you’re signing when you close the sale of your home.

You’ve already cleared several hurdles by finding the right home, negotiating the best price, and getting approved for a mortgage. The last obstacle on your homebuying track is the closing, which can be both tedious and tense. By knowing what to expect and doing some legwork, you can smoothly put your closing behind you. These seven steps will guide you.

1.  Set a Closing Date

Ask your title company to set a closing date and time that meshes with the end of your lease or the sale of your existing home. Don’t want to skip work? Ask for an evening or weekend closing. Tight on cash? Schedule your closing for the end of the month. That’s when you’ll pay the least amount of interest at the closing table.

2.  Gather Your Funds

Buyers usually have to bring money to the closing. Ask the title company what forms of payment it accepts. Chances are you can’t use a personal check.

If you have to move money into your bank account to pay your closing costs, do so a week ahead to avoid last-minute problems. If the title company requires the funds in the form of a cashier’s check, stop by the bank a few days before closing to pick it up.

3.  Purchase Title Insurance

If you’re getting a mortgage, you have to buy a title insurance policy. Think it protects you against problems with the title of your home? Nope, it protects the lender in case the sellers really didn’t own the home or someone else had a claim on it.

To cover yourself, you can buy an owner’s title policy from the same insurance company that sells you the lender’s title policy. Or, shop online at Closing.com, EasyTitleQuote.com, or FreeTitleQuote.com. An owner’s title policy insures you against losses from fraudulent claims against your ownership and errors in earlier sales. In some areas, sellers traditionally pay for the buyer’s title policy.

Whether or not you get the owner’s policy, if you buy a title policy from the same company that issued the prior owner’s title insurance, you can ask for a reissue discount or “bring-down” rate. There’s a discount because the title company only has to check the records filed since that prior owner bought the home, not since the dawn of time.

4.  Line Up Homeowners Insurance

Get quotes and compare policies to be sure coverage will start by your closing date. An annual policy should run $500 to $1,000, depending on your home’s size, age, and amenities. To get a lower premium, opt for a high deductible or buy your homeowners insurance from the same company that insures your car.

If you live in an area where natural disasters occur, like earthquakes, floods, or hurricanes, you’ll need separate insurance to protect your home from those hazards.

5. Review Your Good Faith Estimate and HUD-1 Settlement Sheet

Your lender already gave you a Good Faith Estimate (GFE) that showed your estimated closing fees. Some of the fees on your GFE can’t change and others can rise by 10%. Before you go to the closing, compare the numbers on your GFE with the numbers on your HUD-1 settlement statement. Question your loan officer about any fees that increased.

6.  Do a Walk-Through

Schedule an appointment to walk through the home one last time just before your closing.

  • Make sure repairs you requested have been made.
  • Look for major changes since you last viewed the property.
  • See if the sellers left everything they promised to leave.
  • Check to see that the sellers took all their personal belongings.
  • Test electronics and appliances to ensure they’re still working.
  • Turn on the HVAC and hot water. Are they functioning right?
  • Walk the yard to be sure no plants or shrubs have been removed.

7.  Resolve Issues Identified in Your Walk-Through

If your walk-through uncovers problems:

1.  Delay the closing until the seller corrects them (if your state allows it). But that’s often not feasible because your lease is probably over and you’ve already scheduled movers.

2.  Negotiate a discount to your sales price to cover the cost of the work needed. If the air conditioning is on the fritz and a contractor says the repair will cost $500, ask that the sales price be reduced by that amount. If you make that request at closing, however, be ready for a delay while the title company redoes the paperwork.

3.  Have the title company hold a portion of the seller’s proceeds in escrow until the dispute is resolved. Once that happens, the funds will be released to you or the seller, depending on the outcome.

Related:

  • Do You Have the Right Amount of Homeowners Insurance?
  • Do You Need an Umbrella Policy?

Sources: G. M. Filisko, © Copyright 2014 NATIONAL ASSOCIATION OF REALTORS®

 

10 Green Facts to Test Your Eco-Smarts

10 Green Facts to Test Your Eco-Smarts

by | Oct 16, 2014 | Green Living, Homeownership

Green or Not?

Can you separate the green facts from fiction when it comes to eco-friendly claims? We give our verdict on 10 home products and practices. What’s yours?

Gray is the new green: Just because something is marketed as green or offers green benefits doesn’t mean that there aren’t other factors that temper its green-ness. It’s up to you to decide what level of green you’re comfortable with based on energy efficiency, manufacturing processes, health concerns, safe disposal, and payback — a swoon-worthy mix of variables.

To help you out, we did some research and found that some things can be judged reliably green — and worth your investment of time and money. For the other gray stuff, we provide our point of view so you can make the smart decision for you.

1. Buying a product labeled “organic”

The U.S. Department of Agriculture regulates the term “organic,” so it can’t be used simply as a marketing ploy. Organic products must be “produced without antibiotics, hormones, pesticides, irradiation, or bioengineering.”

More: 6 Green Terms: Which Ones Can You Trust?
HouseLogic Verdict: Green

What’s your verdict?

 

2. Buying a product labeled “natural”

This term isn’t regulated at all, so proceed cautiously. There’s no denying that artificial chemicals can cause health and environmental problems. But so can natural ones, like ammonia. Don’t assume natural is a synonym for earth-friendly, hypoallergenic, or good for you without doing your research.

More: 6 Green Terms: Which Ones Can You Trust?

HouseLogic Verdict: Gray

What’s your verdict?

3. Replacing old, drafty windows with new ones

Although new energy-efficient windows can make your house far more comfortable, they won’t make a big dent in your energy use.
Compare the 7% to 15% annual energy bill reduction (around $250 on average, based on the average $2,200 annual energy bill, per Energy Star) with the often five-figure outlay for new windows — not to mention the environmental impact of throwing your old windows and frames into the landfill — and it’s clear you should make this choice based primarily on aesthetics and comfort, not saving money or going green.

Caulking and sealing all penetrations to your home works great, says Suzanne Shelton, CEO of Shelton Group, a marketing agency that specializes in energy efficiency.

HouseLogic Verdict: Gray

What’s your verdict?

4. Installing solar-powered attic fans

At first blush, attic fans seem like a green slam-dunk: Cooling your attic can help reduce the load on your HVAC system, and powering a fan with solar energy is free. Plus, there’s a 30% federal tax credit through 2016 on the purchase and installation costs — at least for fan’s solar panel, says the IRS, not the fan. Also if a manufacturer has officially certified that the equipment qualifies, you can generally rely on that. (It’s wise to keep manufacturer records and consult with your CPA.)

But studies, like one from the Florida Solar Energy Center, show you need two to three fans to make a difference, and at $400+ a pop to purchase and install just one, you’ll struggle to recover your investment through the slight energy bill savings: roughly $40 per year.

HouseLogic Verdict: Gray

What’s your verdict?

5. Installing a geothermal system

You may look at the price tag for a geothermal heating system and dismiss it out of hand: Systems can cost $10,000 to $25,000 and up. But with federal tax credits for geothermal heat pumps until 2016, you can cut your purchase and installation costs by 30% and your energy bills in half.

Plus, you likely won’t need to replace your system as often as you would a typical heat pump, gas furnace, or air conditioner; geothermal systems can last a lifetime and need fewer repairs than other types of heating and cooling systems. They’re underground, sheltered from weather extremes.

HouseLogic Verdict: Green

What’s your verdict?

6. Replacing inefficient incandescent bulbs with CFLs

CFLs are about 75% more efficient than traditional incandescents, but they don’t perform well in enclosed fixtures, especially in humid bathrooms, and disposal is tricky because they contain mercury.

More: Tips for Cleaning up a Broken CFL Bulb

Keep an eye out for LED lightbulb bargains instead. They’re more expensive than CFLs and only marginally more efficient, but they last up to five times as long. Also consider incandescent halogens when CFLs aren’t the greatest choice — they cost more than traditional incandescents, but they use 25% to 30% less energy and can last up to three times as long.

More: It’s Not True! Incandescents Aren’t Banned

HouseLogic Verdict: Gray

What’s your verdict?

7. Throwing away a 20-year-old refrigerator that still works

If your fridge was made before 1993, it’s an energy hog. Replacing it, even if it still works, with an energy-efficient model can save you $100–$200 per year on your energy bills.
By the way, putting that old fridge in the garage and filling it with beer isn’t considered recycling, nor is it reducing your energy bill or your carbon footprint.

You don’t have to toss the old model in the landfill; see if your local utility will come and pick it up for recycling. Many utilities will even pay you a small rebate for it. Check the DSIRE database for info about utility rebates and incentives by area. (DSIRE primarily tracks municipal utilities with more than 30,000 customers.)

HouseLogic Verdict: Green

More: Is an old fridge worth keeping?

What’s your verdict?

8. Using recycled rubber mulch in your garden

Recycled rubber mulch products keep old tires out of the landfill, and mulch is generally a great way to preserve soil moisture and nutrients.
But rubber mulch is less effective at weed prevention than wood or straw mulches and isn’t permanent as advertised. It breaks down like other mulches do. But because it’s made from hazardous petrochemicals, it presents a risk to your soil and groundwater.

HouseLogic Verdict: Gray

What’s your verdict?

9. Installing a tankless water heater

Tankless water heaters are certainly more efficient than conventional water heaters, but thanks to high upfront costs, unpredictable temperature swings (the infamous cold sandwich), and the fact that they’re still an improving technology, the choice isn’t clear-cut.

You’ll save $70–$80 per year on average, but you could eat that in maintenance costs, especially if you have hard water. Consumer Reports noted that not installing a water softener could shorten your warranty.

HouseLogic Verdict: Gray

What’s your verdict?

10. Installing a white roof

If you live in a warm climate — roughly south of Columbus, Ohio (south of 40° latitude) — or in urban areas where asphalt captures heat — you’d be surprised how much changing your roof color could change your energy bills: 20% on average during the cooling season.

If you’re replacing your roof anyway, the small premium you’ll pay for a light-colored, or cool, roof will be more than offset by the energy savings over the lifetime of the roof.

But be sure to check your home owners association rules before installing a new roof. Some HOAs are very particular about aesthetics.

HouseLogic Verdict: Green

What’s your “green” verdict on these products and practices?

 

Source: Karin Beuerlein © Copyright 2014 NATIONAL ASSOCIATION OF REALTOR

 

How to Replace Weather Stripping

How to Replace Weather Stripping

by | Oct 16, 2014 | Homeownership, renovations

Need Help Replacing Weather Stripping?

When weather stripping on doors and windows gets worn out, cold air comes sneaking in. Here’s how to replace weather stripping and stop air leaks.

Weather stripping on windows and doors protects the home from air leaks while increasing comfort and saving energy. But as weather stripping ages, it loses its effectiveness. Stay ahead of the game by checking for worn-out weather stripping and replacing it.

Identifying Worn Weather Stripping

Weather stripping deteriorates due to age, friction, and exposure to the elements. It also can be damaged by people, pets, and pests. At least once each year, inspect your windows and doors to check for air leaks that indicate your weather stripping isn’t doing its job.

  • Self-adhesive foam tape loses its grip over time, causing it to pull away from the door or window frame — or fall off completely. Foam also can lose its resilience, no longer springing up to fill the gap.
  • Rubber and vinyl weather stripping becomes dry, brittle, and cracked. Over time, it can also lose its shape and effectiveness.
  • Spring-metal V-shaped weather stripping bends out of shape, cracks in spots, and comes loose thanks to missing nails.

How to Remove Old Weather Stripping

For peel-and-stick-type weather stripping, simply pull the foam strips off the door or window by hand. Stripping that is fastened in place with nails or screws requires a more tedious process of locating and removing all the fasteners.

Options for New Weather Stripping

There’s no shortage of weather stripping options at hardware stores and home improvement centers. As is often the case, the cheaper and easier the product is to install, the less effective and durable it probably is over time.

Adhesive-backed foam tape is inexpensive — costing less than a buck a foot — and peel-and-stick types are easy as pie to install. It works best where the bottom of a window sash closes against a sill, or a door closes against a doorframe. It’s the compression that produces the seal. Don’t expect this product to survive longer than 3 to 5 years.

V-shaped weather stripping, sometimes called tension-seal weather stripping, is the best option for the side channels of a double-hung window or a tight-fitting door. This product springs open to close gaps and plug leaky windows and doors.

Inexpensive peel-and-stick V-shaped vinyl (as little as $0.50 per foot) is easy to install but won’t last much longer than foam tape. More expensive copper or bronze styles cost as much as $2 per foot and must be nailed into place, but they look better and will last decades.

Tubular rubber or vinyl gaskets prove the most effective for sealing large and irregular gaps, such as around an old door. These hollow tubes are large enough to plug big gaps but soft enough to compress nearly flat. Types that are nailed in place last longer than peel-and-stick varieties. Prices range from less than $1 per foot for peel-and-stick to $1.25 per foot for nail-in-place.

Prepare the Surface

Before installing any new weather stripping, start with a smooth, clean, and dry surface. Remove all old adhesive using an adhesive cleaner and perhaps a light sanding. Fill and sand old nail holes. If old screw holes can’t be reused, fill and sand those as well.

Installation Tips

  • Some peel-and-stick types should only be applied when the temps are at least 50 degrees. Check the product label.
  • Start with one small area to make sure the door or window opens and closes without difficulty before completing the entire job.
  • Measure twice before cutting to prevent mistakes and waste.
  • Cut rubber and vinyl varieties with shears or a utility knife, and metal types with tin snips. Be careful not to bend the thin metal while cutting it.
  • Make sure to face the opening of V-shaped weather stripping out toward the elements to prevent moisture from getting inside.

Installing Weather Stripping

Adhesive-style weather stripping: Remove the backing and press firmly in place. Removing the backing as you go helps prevent the sticky part of the strip from accidentally adhering to something it shouldn’t.

Nail-in weather stripping: Fasten the strips in place by nailing through the pre-punched holes. For double-hung windows, you’ll need to install the lower half, drop the sash, and then install the upper half.

 

Source: Douglas Trattner, © Copyright 2014 NATIONAL ASSOCIATION OF REALTORS®

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