The Biggert Waters Flood Insurance Reform Act is changing the way flood insurance premiums are calculated for many across the country. As Florida flood insurance homebuyers, it is essential to understand how these changes may impact your home purchase. Below are the top six bullet points you need to know.
- For flood policies issued prior to July 6, 2012 (with no lapse in coverage) that are secondary homes, non-residential buildings and severe repetitive loss and flood damaged buildings rebuilt (in this previously subsidized rate class) will all see a 25% increase each year until they reach risk based levels, which won’t be known until they supply that elevation certificate.
- After Oct. 1, 2013 no new subsidized policies will be quoted or issued using pre-FIRM rates. Instead, you will need to obtain an elevation certificate and the rates for your home will be the actuarial rates based on elevation figures.
- Policies written with pre-FIRM rates on or after July 6, 2012, when the BW12 was enacted, will be non-renewed and require a new elevation certificate and new application at their first renewal after Oct. 1, 2013.
- On existing, primary homes–pre-FIRM, high risk homes–subsidies will remain, but renewal premium rates will gradually increase each year (approx. 16-17% this year) until the owner purchases an elevation certificate and determines what the risk based rates might really be.
- The existing premium cap on average annual premium increases for NFIP policies will now be up to 20% each year.
- A 5% surcharge of the premium amounts will be assessed on all NFIP policies (except Preferred Risk) to build a Reserve fund for payment of future claims.
Florida flood insurance homebuyers should also be aware that the National Flood Insurance Program (NFIP) managed by FEMA continues to update its rate structures. Understanding your flood zone and obtaining an elevation certificate early in the buying process can save you significant costs in the long run.
Call our office today to make sure you understand the costs associated with insuring your next home. Learn more about our flood insurance coverage options or call us at 1-877-277-2715.
