Rising flood insurance premiums could block potential homebuyers ...

By New Orleans City Business, April 16, 2012

National Flood Insurance Program rates increased again in February after dropping slightly in January throughout most of the New Orleans area, the exception being St. Tammany Parish, where there was a 30-cent drop.

The latest available figures as of Feb. 29 show annual premiums in Orleans Parish, where there are 90,001 policies, rose to $875.68 in February from $874.30 in January.

In Jefferson Parish, where there are 97,685 policies, average annual premiums increased to $754.83 in February from $752.85 in January.

For Realtors, flood insurance coverage in Southeast Louisiana can be a challenging part of the sales process.

?It can actually take someone out of affording a certain dollar-value,? said Renee Ferrera, CEO of Keller Williams Realty Crescent City Westbank Partners.

Ferrara noted that the cost of insurance can in some cases be upwards of $200 to $400 a month, a pricy addition to the average homebuyer?s already-delicate mortgage equation.

?It can kick somebody out of their loan-to-value,? she said.

Ferrara said her real estate team, like other companies, asks potential homebuyers to start looking for insurance options at the start of the process.

Ferrara said that from what she has seen, flood insurance prices have been rising everywhere, but are the highest in flood-prone areas of St. Bernard and Plaquemines parishes.

The average annual premium for the 6,092 policies in Plaquemines Parish grew to $770.35 in February from $767.99 in January. In St. Bernard Parish, 12,173 policies had an average annual premium of $596.43 in February, compared with $594.98 in January.

St.Tammany Parish?s 35,690 policies in February were at an average of $551.03, slightly less than the $551.33 January average.

FEMA also provided the following breakdown by municipality:

? Kenner: 16,155 policies at an average of $886.82 a month, up from the $884.42 average in January;
? Gretna: 3,737 policies at an average of $856.67, slightly more than the January average of $856.15;
? Slidell: 8,045 policies at an average of $826.48, more than the $823.65 average a month earlier;
? Covington: 1,385 policies at an average of $702.63, more than the January average of $701.46;
? Westwego: 1,530 policies at an average of $645.23, up from the $643.65 average in January; and
? Harahan: 2,650 policies at an average of $576.74, down from the month-ago average of $577.26.

Louisiana accounted for the third most premiums with policyholders having paid $346.69 million into the program. The total that would be paid out in a worst-case scenario for Louisiana would be $112.3 billion.

Statewide, there were 493,416 policies at an average of $702.63, up for a fourth month from the $701.83 average in January.

Florida had the most with nearly 2.06 million policies at an average of $489.48, followed by Texas with 656,335 policies at an average of $542.42.

There were nearly 5.59 million policies nationwide at an average of $624.96, more than the $623.84 January average.

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