Well ladies and gentlemen, watch your flood renewals, because as of April 1, 2015 FEMA began the implementation of the congressional mandated reforms to the NFIP – National Flood Insurance Program. Based on the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) which was enacted to repeal and modify the Biggert-Waters Flood Insurance Reform Act of 2012. These new laws will slow some of the rate increases and offer some policyholders relief that saw gigantic rate increases in 2013 and 2014 based on the prior storms. The flood insurance rates and other charges were revised for new and existing policies on April 1, 2015.
One of the new laws that will affect everyone is an annual “surcharge” on all new and/or renewed policies. This is a flat fee applied to all policies based on occupancy type and is not at all associated with the flood zone you sit in, or the construction date of the dwelling. In regards to home ownership this rate will differ for year round residents vs. second home owners. A year round resident will receive a $25 surcharge while a second homeowner will be receiving $250 surcharges for each and every home you own (other than your primary which will be the standard $25 rate). Any condo or Multi-Family Residence will be set at a $250 surcharge as will any non-residential structure.
This surcharge is being used to compensate for lost revenue based on the slowing of the subsidized rates being eliminated immediately but gradually moving into a full-risk rate for some of the older homes that have been “grandfathered” in for so long. It will be in effect and collected annually until all subsidies are eliminated completely.
Another change that is being implemented is that the maximum deductible for a flood policy will increase to $10,000 for single-family and two-to-four family dwellings. If selected this deductible would apply to both contents and building. Based on the selection of the higher/maximum deductible, the NFIP claims that it could result in up to a 40% discount from the base premium. Please check with your lender if you are interested in increasing your deductible as this level may not meet mandatory purchase requirements.
There are many additional changes being made to the program that I would be glad to share with you if you are interested. Just let me know! As always, you have a trusted resource in the sales department here at Outer Banks Blue. Please feel free to contact us 7 days a week for any question you may have in regards to your home or another home in your neighborhood. We would be honored to assist you or anyone you would like to refer to us for any of your buying and selling needs.