With the Government shutdown taking center stage, Many Folks have not realized the changes in the Flood Insurance program (NFIP) triggered by the Biggert-Waters Act of
A recent buyer from the U.S. Virgin Islands who planned to purchase a 900-square-foot home in Sanibel Island Florida until he found out the flood premium would jump from $2,440 to $16,092 when he renewed next year. That deal fell apart right away.....
Not everyone will be affected immediately by the new law – only 20 percent of NFIP policies receive subsidies.
Here are some of the biggest changes
• Owners of non-primary/secondary residences in a Special Flood Hazard Area (SFHA) will see 25 percent increase annually until rates reflect true risk – which began January 1, 2013.
· Grandfathering Changes Expected in 2014
· The Act calls for aphase-out grandfathered rates and a move to risk-based rates for most properties when the
· community adopts a new Flood Insurance Rate Map. If you live in a community that adopts a new, updated
· Flood Insurance Rate Map (FIRM), grandfathered rates will be phased out. This will happen gradually, with new rates increasing by 20% per year for five years. Implementation is anticipated in late 2014.
• Owners of property that has experienced severe or repeated flooding will see 25 percent rate increase annually until rates reflect true risk – beginning October 1, 2013.
• Owners of business properties in a Special Flood Hazard Area will see 25 percent rate increase annually until rates reflect true flood risk -- beginning October 1, 2013.
(Each property’s risk is different. Some policyholders may reach their true risk rate after a couple years of
increases, while other policyholder increases may go beyond five years to get to the full risk rate required by the new law. Rate tables on true risk will not be available until June 2013.)
Primary residences in Special Flood Hazard Area will be able to keep their subsidized rates unless or until:
• The property is sold; this is where the new home buyers are effected
• The policy lapses;
• You suffer severe, repeated, flood losses; or
• A new policy is purchased.
What Can Be Done to Lower Costs?
- Call us about your insurance options.
- You will probably need an Elevation Certificate to determine your correct rate.
- Higher deductibles might lower your premium.
- Consider incorporating flood mitigation into your remodeling or rebuilding.
- Building or rebuilding higher will lower your risk and could reduce your premium.
- Consider adding vents to your foundation or using breakaway walls.
- Talk with local officials about community-wide mitigation steps.