One of the biggest concerns that many housing experts across the country have had in the last few months, before the U.S. Senate voted to keep rates for coverage through the National Flood Insurance Program as low as possible going forward, was the way in which a spike in rates would affect current homeowners and new shoppers alike. Insurance agents should be aware that some are now praising the bill saying it will be good for the mortgage and construction industries, and that could, in turn, benefit their bottom lines as well.
The resulting larger number of mortgages being granted for new housing construction, as well as an increase of purchases for existing homes, is likely to benefit the economy as a whole, according to the National Association of Home Builders. In addition, though, it could serve to assuage many of the fears experts might have had about the ways in which significant flood insurance rate hikes would affect the sale of homes overall.
“By providing a more affordable rate structure for policyholders and repealing point-of-sale rate increases, the bill is a boon for home owners and home buyers,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “Further, it gives an important boost to home building and remodeling, while simultaneously shoring up the NFIP. NAHB commends the bipartisan efforts of lawmakers in both the House and Senate for working to pass flood insurance legislation that will help the housing industry continue to rebound.”
Why was this a potential problem for the insurance industry?
In general, it seemed that sales of homes in areas where flood insurance costs were set to surge had slowed to a crawl as shoppers shied away from properties where they might have faced premium hikes worth thousands of dollars soon after the purchase. Likewise, many homeowners were also worried about how they’d be able to pay for these costs in addition to their mortgages and other home insurance considerations.
However, it might still be wise for insurance agents to make sure they’re doing all they can to ensure that consumers are keeping their coverage costs as low as possible, because consumers might still face some amount of increases going forward. The more agents can save their customers while meeting their specific needs, the more satisfied they might be with their coverage.