Congress recently passed the Flood Insurance Reform Act of 2012 (Biggert-Waters) and the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) which result in many importantchanges to the National Flood Insurance Program (NFIP). that will be effective on April 1, 2015 and will affect Flood Insurance premiums.
The NFIP defines special high-risk flood hazard areas as those with at least a 1 percent chance of annual flooding. UnderBiggert-Waters, premium rates on many properties in these special flood hazard areas increased. Rates for nearly all buildings located in special flood hazard areas will be revised over time to reflect full flood risks. In addition, recent legislation phases out subsidies for some buildings in high-risk flood areas. As a result, rates for some older buildings will rise until they reach full-risk rates. In addition, all policyholders will be subject to new assessments and surcharges.
Even if you build to minimum standards today, you will be subject to significant rate increases upon remapping if your flood risk changes in the future.
Here are some things that you can do proactively to try to lower your insurance costs:
- Talk to your insurance agent about your options
- Save money using the Grandfather Rule (Grandfathering)
- If you do not have one already, you will likely need an Elevation Certificate to determine your true risk premium and to make informed decisions about flood mitigation and rebuilding
- Higher deductibles might lower your premium
- Consider incorporating flood mitigation into your remodeling or rebuilding
- Talk with local officials about community-wide mitigation steps
Find out more about flood insurance and to find out if you are in a special high-risk flood hazard area.