NFIP to Implement Changes Effective April 1, 2017

Property & CasualtyThe National Flood Insurance Program (NFIP), overseen by FEMA, allows homeowners, business owners and renters in participating communities to purchase federally backed flood insurance. The program is currently in the hole by over $20 Billion so the feds are constantly making changes in hopes of reducing the deficit.

The next round of changes goes into effect April 1, 2017. The primary changes are rate increases:

  • For Pre-Firm subsidized policies (meaning high risk flood zone buildings built prior to the first flood map and NOT currently rated with an elevation certificate):
    • Primary residences – 5% average rate increase
    • Non-Primary residences – 24% average rate increase
    • Business properties – 23% average rate increase
    • Severe repetitive loss properties – 23% average rate increase
    • Condominium & multi residential properties – 8% average rate increase
  • Newly Mapped properties (where the flood zone recently changed from low to high risk) – 14% average rate increase
  • Most other policies will see an average rate increase of 6.3%

Although it can be tempting to want to non-renew coverage due to increasing premiums, there are other factors to consider. Gaps in coverage can result in ineligibility for future “grandfathering” if the flood maps change, and attempts to return to the NFIP later could result in other costly ramifications. Also, some private insurance companies are now offering flood insurance as an option to the NFIP. We can work with you to find the most competitive option available.

Many people believe that flood insurance is not needed and that Federal disaster assistance will help them if they experience a flood. However, floods are not always considered a federal disaster and when they are, aid is often in the form of a loan, which must be paid back with interest.

Flooding is the #1 source of natural disaster losses in the U.S. and your home or property policy likely excludes flood coverage. The premium is small in comparison to the cost of damages a flood can cause. To learn more about The National Flood Insurance Program and how upcoming changes might affect you, visit the www.floodsmart.gov page or contact the Flood Unit Director.

Sources: FEMA

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