Flood Insurance Update



You might say, why is Flood Insurance of importance to me if I don’t live in a required flood insurance area? Like alligators walking in the street all over Florida, there is a perception that all of Florida is in flood zone and as maps are changed what once was not in a flood zone, might one day be. As REALTORS, we want to keep you informed about any issues that affect your property. This is the latest information we are aware of.

On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law. The law repeals and modifies certain of the provisions of the Biggert-Waters Flood Insurance Reform Act which was enacted in 2012, which should come as a welcomed relief to many of the homeowners and real estate professionals in our community.

The Homeowner Flood Insurance Affordability Act will lower the recent rate increases on some policies, prevent some future rate increases and implement a surcharge on all policy holders. The Homeowner Flood Insurance Affordability Act will also repeal certain rate increases that already went into effect and provide refunds of the excess premiums that policyholders were charged pursuant to the requirements of the Biggert-Waters Act. The key provisions of the Homeowner Flood Insurance Affordability Act are the following:

FEMA is required to consult with it’s partner insurers to develop guidance and rate tables.

Refunds will apply to policyholders in high-risk areas who after purchasing a new flood insurance policy on or after July 6, 2012, were required to pay their full-risk rate .

Refunds may apply to policyholders who renewed their policy after the Homeowner Flood Insurance Affordability act was enacted on March 21, 2014 and whose premium increased more than 18%.

Refunds will not apply to policyholders paying the 25% annual rate increases as required by Congress in the Biggert-Waters Act, for Pre-FIRM subsidized non-primary residence, business, severe repetitive loss property or building that was substantially damaged or improved.

Premium Rate Subsidized Policies:
The new law requires gradual rate increases to properties now receiving subsidized rates instead of immediate increases to full-risk rates required under the Biggert-Waters Act.

Flood insurance premiums cannot increase more than 18% annually, with limited exceptions.

Polices for the following properties will continue to see up to a 25% annual increase as required by Biggert-Waters until they reach full-risk rate:
-Older non-primary homes
-Older business properties
-Severe repetitive loss properties

New Surcharge on all Policies:

A new surcharge will be added to all policies to offset the subsidized policies.

FEMA is looking forward to working with Congress, the private Write Your Own Insurance Companies and other stakeholders to implement these Congressionally-mandated reforms and to working toward their shared goals of helping families maintain affordable flood insurance, ensuring the financial stability of the NFIP and reducing the risks and consequences of flooding nationwide. FEMA will continue to identify and publish special flood hazards and flood risk zones as authorized and required by Congress.

It is important to note that the above-referenced modifications will not be implemented immediately as FEMA has stated that it will take time to roll out the new law. As always, if you have any specific questions regarding the current Flood Insurance laws, please reach out to your local real estate attorney or insurance provider.

Please contact Marie Avery at 941-725-0911, or email Marie@AveryRealtyTeam.com if you have any questions about our Florida Real Estate market.

About Marie Avery-Withers