Many Fort Myers, Cape Coral and Naples home and business owners are starting to feel the bite of the the first National Flood Insurance Program (NFIP) change since 2004. Designed to allow the NFIP to raise rates to reflect the “true risk” of flood losses and make the flood program more financially stable – the Biggert-Waters Reform & Modernization Act 2012 legislation was signed into law in July 2012 and is destined to change the face of flood insurance for years to come.
The reform will serve to increase flood insurance rates for some, but not all. While many of these changes are scheduled to begin October 1, 2013, some of the changes have already been implemented.
It cannot be understated how significantly these changes will affect some home and business flood insurance premiums.
Summary of the more significant changes that property owners may experience as a result of the law.
- The law will increase the annual limitation on premiums from 10% to 20%.
- The law will remove the Pre-FIRM (Flood Insurance Rate Map) subsidies.
- The law will require properties that previously were not required to utilize elevation certificates as a basis for rating, obtain them.
- The law will require FEMA to phase in actuarial sound rates over 4 years for the following pre-FIRM properties:
- Non-primary residences
- Severe repetitive loss properties
- Any property where flood losses have exceeded the property value
- ANY business property and,
- Any property that has had substantial damage (>50% of fair market value)
- The law will charge actuarial rates to any prospective insured that refuses to accept any offer of mitigation assistance following a major disaster.