Median home prices in Massachusetts are way up, but so is the risk of property damage from flooding. With flood risk only increasing in the future thanks to climate change, and with many homeowners not being prepared for the increase by keeping up with flood insurance requirements, what does this mean for homeowners?
Sometimes Higher Isn’t Better
According to a recent article in the Boston Globe, the median home price in Massachusetts has increased by more than 20% in the past year, reaching a record high of $635,000. This is due to a number of factors, including low inventory, strong demand, and rising interest rates. However, as home prices have increased, so has the risk of property damage from flooding. Massachusetts is a coastal state and is prone to flooding, especially during hurricanes and nor’easters. In fact, the state has experienced more than 1,000 floods in the past 50 years.
The risk of flooding is only going to increase in the future. Climate change is causing sea levels to rise, which is making coastal areas more vulnerable to flooding. In addition, more intense storms are becoming more common, which can also cause flooding. This increased flood risk is putting homeowners at increased risk of financial losses. Flood insurance is available to help homeowners pay for the cost of repairs after a flood, but the effectiveness of flood insurance is being reduced.
National Flood Insurance Underwater
The primary issue here is that the National Flood Insurance Program (NFIP), which provides flood insurance to homeowners, is facing financial problems. The program is currently $20 billion in debt and is not able to pay all of the claims that are filed. This means that homeowners may not be able to get the full amount of money they need to repair their homes after a flood. In addition, the NFIP is increasing premiums for flood insurance. This is making it more expensive for homeowners to get flood insurance.
The combination of rising home prices, increased flood risk, and reduced effectiveness of flood insurance is putting homeowners in Massachusetts at risk of financial losses. Homeowners should take steps to protect themselves from flood damage, such as buying flood insurance and making flood-proofing improvements to their homes.
What Can You Do to Protect Your Own Property
Whether you live in Massachusetts or you’re simply concerned about the impact flood damage could have on your own home, it’s never a bad idea to take some additional steps to protect your property. Here’s what you should be considering:
- Buy flood insurance. This is the best way to protect yourself from financial losses in the event of a flood. Even with the NFIP facing financial issues, it’s better to have at least some financial protection than none at all.
- Make flood-proofing improvements to your home. This could include installing flood vents, raising electrical outlets, and sealing cracks in your foundation. It’s recommended that you speak with a qualified contractor about what this would entail specifically for our property.
- Stay informed about flood risks. The Federal Emergency Management Agency (FEMA) has a website with information about flood risks in Massachusetts and throughout the US.
- Develop a flood plan. This should include a list of contact information for your insurance company, your local emergency management office, and your neighbors.
By taking these steps, homeowners can help to protect themselves from the financial losses that can occur from flooding.
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