Let’s be honest: as good as it feels to help someone close on a new home, dealing with our current insurance issues can be exhausting for everyone involved.
Buyers all across southern Louisiana are doing their best to avoid getting a new flood insurance policy thanks to Risk Rating 2.0.
We can’t really blame them. After all, there’s nothing more frustrating than potentially having to deal with two agents for something that could be handled by one.
Plus assuming a flood policy tends to cap the increase at 10% per year, which is much nicer for buyers than the chance of taking on higher premiums and fees with a brand-new policy.
But on the flip side, the amount of paperwork and hoop-jumping needed to assume the seller’s flood policy can be almost as frustrating as dealing with two agents. At least, it was until very recently.
The good news is, we’ve got a better way.
No Need To Assume
You can now get your buyer a new policy with the seller’s original rate – no assumption needed.
We are now able to write a new policy at the same premium and same rate caps that the seller was paying for their flood insurance. All we need for this is the old policy declaration page from the seller, and it’s just like setting up any other policy. No need to juggle agents or figure out who owes what when closing.
Here are the guidelines for this to apply:
- The building is not in condo ownership before or after the transaction
- The building was insured by the NFIP with building coverage at the time of the transaction
- The new NFIP policy will be effective on, or within one year after, the transaction date, and
- The insurer must submit the prior NFIP policy number & prior NFIP policy number
Some additional requirements may apply. Please contact me for details.
What This Means For You And Your Clients
Here are just a few of the perks that come from this new update:
It Should Speed Up the Home Buying Process
Without having to juggle agents and bounce between buyer and seller to get signatures and payment agreements, the home-buying process is much faster, and closing can be done in a fraction of the time it would normally take.
It’s Easier On the Buyer, Seller, Agents, and Mortgage Company
Ultimately, this updated process is less stressful on clients and agents alike. For the buyers, they can still save a good deal of money, and the seller has much, much less work to do. And as for the agents–and the mortgage company–there’s no more trying to negotiate and figure out who pays what at closing.
The Borrower Has Just One Agent For Both Policies
This is one of the biggest perks from a logistics standpoint. With just one agent, there’s no phone tag, no juggling, and no headaches.
This is not to say that assuming is completely extinct. If a buyer is doing a cash sale, then it would still be in their best interest to assume the seller’s flood insurance, mostly because of their 30-day waiting period. But, considering they wouldn’t need a mortgage loan on top of it, it’s a different situation than your typical home buyer’s process.
Ready to stop the headache of assuming policies? Let’s catch up. I’d love to talk more about this exciting change and help you get your buyers the best flood policy they can have.