Flood Insurance Update

Posted on: March 28th, 2014 by Leslie_Zucker

This week Con­gress passed and the Pres­i­dent signed into law the Home­own­er Flood Insur­ance Afford­abil­i­ty Act of 2014. The new law amends pro­vi­sions of the Big­gart-Waters Flood Insur­ance Reform and Mod­ern­iza­tion Act of 2012 that sig­nif­i­cant­ly reformed the Nation­al Flood Insur­ance Pro­gram. Both pieces of leg­is­la­tion have impli­ca­tions for home­own­ers in the Ashokan Water­shed who hold flood insur­ance poli­cies with the Nation­al Flood Insur­ance Pro­gram. The major changes that you can expect to see through the 2014 leg­is­la­tion are:

• Flood insur­ance pre­mi­ums for pri­ma­ry own­er occu­pied res­i­dences will increase 5% to 18% annu­al­ly until actu­ar­i­al rates are met (pre­vi­ous­ly the increase was 25% a year).

• Pre-FRIM prop­er­ties in the SFHA that are sold may con­tin­ue to receive sub­si­dized rates (pre­vi­ous­ly rates were to go to actu­ar­i­al once a sub­si­dized prop­er­ty was sold).

• Lapsed poli­cies may be renewed at sub­si­dized rates (pre­vi­ous­ly once a pol­i­cy lapsed it could only be renewed at actu­ar­i­al rates).

• Post-FIRM homes that were insured at sub­si­dized rates will con­tin­ue to receive sub­si­dized insur­ance (pre­vi­ous­ly they were to go imme­di­ate­ly to actu­ar­i­al rates)

• Homes that are new­ly remapped into a SFHA because of a map change can receive a pre­ferred risk (sub­si­dized) flood insur­ance pol­i­cy for the first year. After­wards their rates will increase 18% a year until actu­ar­i­al rates are reached.

• A new sur­charge for all flood insur­ance hold­ers will be ini­ti­at­ed. Pri­ma­ry res­i­dences with flood insur­ance will be see a $25 sur­charge added to their bill, while own­ers of all oth­er types of insured struc­tures will see a $250 sur­charge added to their bill.