Recent legislation phases out subsidies for some older buildings that were in high-risk flood areas. As a result, rates for these buildings will rise until they reach full-risk rates. In addition, all policyholders are subject to new assessments and surcharges which became effective April 1, 2015.
Make Sure You Pay the Correct Surcharge
As of April 1, 2015, every new or renewed NFIP policy includes an annual surcharge required by the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA). The surcharge amount depends on the use of your insured building and the type of policy insuring the building, regardless of its flood zone or date of construction.
Policies for owner-occupied, single-family detached buildings and individual condominium units that are your primary residence will include a $25 HFIAA surcharge. If you have a contents-only policy for a rental unit that is your primary residence, it includes the $25 HFIAA surcharge. Policies for non primary residences and all other buildings include a $250 HFIAA surcharge.
To ensure that you pay the correct surcharge at renewal, you must complete and return a Verification of Primary Residence Status form to your flood insurance provider, which will mail you the form before it issues the renewal notice. You are required to respond within 30 days of receipt.
To receive the $25 HFIAA surcharge, you or your agent must submit one of the following with the form:
- Drivers license
- Automobile registration
- Proof of insurance for a vehicle
- Voter registration
- Documents showing where children attend school
- Homestead Tax Credit form for primary residence
If your policy is coming up for renewal soon and you have not received the letter and form—or if you have misplaced it—please contact your insurance agent.
EFFECTIVE APRIL 1, 2016:
Beginning April 1, 2016, the National Flood Insurance Program (NFIP) will begin implementing additional flood insurance program changes resulting from reform legislation. These changes may significantly affect what you pay for your flood insurance. While some property owners may see minimal policy cost increases, others will see larger increases in premium. For example, policyholders with buildings in high-risk areas built before that community’s first Flood Insurance Rate Map (pre-FIRM) will experience larger increases in premium.
A summary of all of the changes is below:
- Overall, average premiums will increase by 9 percent.
- On April 1, 2016, 25% annual increase for pre-FIRM business properties begins.
Buildings newly mapped into a high-risk Special Flood Hazard Area (SFHA) will receive premium rate increases using a FEMA multiplier that will change every January 1 (beginning January 2017) based on the year the new map became effective.
Certain Lapsed Policies Now Rewritten at Full-Risk Rates (with two exceptions)
Lapsed policies on pre-FIRM subsidized-rated buildings or policies rated using the Newly Mapped procedure will be rewritten using full-risk rates if coverage has lapsed more than 90 days or lapsed twice, regardless of the number of days, unless:
- The lender no longer required the insured to obtain and maintain flood insurance at the time of lapse or cancellation; OR
- The insured was in a community that was suspended from the NFIP, and the coverage was purchased within 180 days of the community’s reinstatement.