Changes Coming to the National Flood Insurance Program What to - PowerPoint PPT Presentation

Changes Coming to the National Flood Insurance Program – What to Expect Impact of of cha hanges to to the the N NFI FIP u under the the Bi Biggert- Wate ters Fl Floo ood Insurance a and Refo form Ac Act t 0f f 2012

Why the Changes to the NFIP? 1968: Congr gres ess creat ated the N NFIP to mak ake afforda dable e flood i d insurance  generally ly av avail ailable. To par artic icip ipate, communities ad adopt an and enforce flo loodplai ain man anag agement  mea measures for all new ew develo lopment. For structures built before FEMA MA map apped the Specia ial Flo lood Haz Hazar ard Area a  (called ed pre-FIRM M properties), the NFIP mad ade f flood in insurance av avai ailable at at subsidi dized r d rates es . . 45 y yea ears later er: Th The e costs and d consequences o of f flooding a are e increasing.  Artific icia ially l low r rat ates an and d dis iscounts n no l longer ar are s sustainab able.  In 2012, Congr gres ess passed l ed legislation to make e the e program m more  sustain inable an and financia ially s sound over t the long term. 2

Changes to NFIP Insurance Congr gres ess passed ed the e Bigger gert W Water ers Flood d Insurance e Reform m and d  Modernizatio ion Act of 2012 (B (BW-12), ), which h wil ill l in in par art:: Make the NFIP more financially stable by raising rates on certain classes of • property to reflect true flood risk Establish a Reserve Fund (5% for most policies) • Annual premium adjustment cap raised from 10% to 20% • The e chan anges will ill mean rat ate increa eases es f for most policyholde ders  Implementation  BW-12 Section 100205 Partial Implementation Jan & Oct 2013 • BW-12 Section 100204 Over 5 residential coverage limit – June 2014 • BW-12 Section 100210 Deductible changes - June 2014 • BW-12 Section 100207 Map Changes / Grandfathering - planned • implementation October 2014 3

NFIP Full Risk Rating Post st FIRM str struc uctur ures have always b been n full r ull risk sk rated Use of Elevation Certificate Pre-FIRM Pr RM p propertie ies rated ed using p g post-FIRM RM procedures for Full Ris Risk Rat Rate Based on elevation and compliance information on an Elevation Certificate Elevation of “Lowest Floor” in relation to the Base Flood Elevation A zone - Flood venting Other compliance factors (sub-grade crawlspace, basement, etc) V-zone – foundation construction / free of obstruction 4

NFIP Rate Changes Pre-FIR IRM N M Non-Primary (d (definition cha changing J June 2014) 2014) Janua nuary 2 y 2013 rates will increase 25 % annually until they reflect the full-risk rate. Pre-FIR IRM M Prim imary Residences Oct ctober 2013 2013  At the sale/purchase of a property Subsidized rates cannot be assigned to a new owner   After a policy lapse  New Policies - Policies for buildings uninsured as of the date that the law was passed (July 6, 2012)  If an offer to mitigate has been refused 5

NFIP Rate Changes Pr Pre-FIRM business ss properti ties s October er 2013 • will increase by 25% annually until they reflect the full-risk rate. Repetit itively f ly flooded b buildin ings October er 2013 Will increase by 25% annually until they reflect the full-risk rate. • Repetitive Loss Includes buildings with cumulative flood insurance claim payments that meet  or exceed fair market value. Severe Repetitive Loss properties of one to four residences (SDF).  6

Adoption of a new flood map? Sect ection 100207 100207 - Plan anned I d Impleme mentat atio ion i in 2014 2014  Grandf dfather ering- - charging of insurance premiums based on a prior FIRM Continuous Coverage • Built in Compliance • Phase-out of grandfathering for certain properties to accurately reflect • the flood risk (full risk rate). 20% annually / 5 year phase out Trigger - A community adopts a new, revised or updated Flood • Insurance Rate Map (FIRM) New SFH FHA – 20% annually / 5 year phase in • Elimination of PRP Eligibility Extension • Implementation i is under d development by FEMA HQ 7

What can be done to Lower Costs? Home ome and busi siness o ss owners: s: Talk to your insurance agent about your insurance options  Use of an Elevation Certificate to determine full risk rate.  Higher deductibles  Consider mitigation   Building or rebuilding higher will lower risk and reduce your premium  Adding flood vents to foundation or installing breakaway walls Talk with local officials about community-wide mitigation steps  Com ommu munity y leaders: Consider joining the Community Rating System (CRS) or increasing your CRS activities to lower  premiums for residents. Higher community standards (freeboard)  Talk to your state about grants. FEMA issues grants to states which can distribute the funds to  communities to help with mitigation and rebuilding. Co Community Floodplain A Administrator • Implement flood ordinance • Update training (webinars / State NFIP Coordinator/ FEMA R10 / EMI) Partner with Surveyors and Insurance Agents in your area  8

Contact Information  FEMA A Regi egion 1 10 Insuran ance Pr e Progr gram am Deborah F h Farmer 425 425-487 487-2023 2023 deborah. h.fa farm rmer@ r@fe fema.dhs hs.gov  NF NFIP P Regi egional al M Man anager ager Krist stin Mini nich 360 360-65 658-8188 8188 kmini nich@nf @nfip-iservice ce.co com  Co Community Floodplain A Administrator  State N NFIP Co Coordinator  Map S Service Ce Cent nter http:/ ://www ww.ms .msc.f .fema.go gov 877 877-336 336-26 2627 27 9