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

• f cha

hanges to to the the N NFI FIP u under the the Bi Biggert- Wate ters Fl Floo

• od Insurance a

and Refo form Ac Act t 0f f 2012

2

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

• f 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.

3

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

4

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

Pr Pre-FIRM 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

5

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

6

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
• r exceed fair market value.
• Severe Repetitive Loss properties of one to four residences (SDF).

7

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

8

What can be done to Lower Costs?

Home

• me 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

• mmu

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

9

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