Please pardon the blanket email, but wanted to pass along this information to our partners. As you are aware, the National Flood Insurance Program (NFIP) has been under severe strain the past four (4) years and Hurricane Sandy has exasperated the issue. As such, the NFIP will be instituting major premium changes. Attached is the summary of changes from the NFIP in accordance with the Biggert-Waters Flood Insurance Reform Act of 2012 (aka BW 12) and below is only a few of the listed changes.
- Flood premiums will increase an average of 1% to 25% (depending on coverage, risk and zone) for policies written or renewed on or after October 1, 2013.
- The federal policy fee will increase from $20 to $22 for preferred risk policies (PRPs); and from $40 to $44 for all other policies.
- The NFIP will no longer allow renewals for certain pre-FIRM buildings in a special flood hazard area (SFHA) or Zone D to receive subsidized premium rates (see table 2A).
- The NFIP will no longer provide any extension of premium rate subsidy to new or lapsed pre-FIRM properties/policies, which will be subject to full-risk rating.
- PRPs issued under the Eligibility Extension-with a newly revised map showing the property as being located in an SFHA effective on or after October 1, 2008-will see annual increases averaging 20% beginning with new business and renewals effective on or after October 1, 2013.
- In accordance with Section 100212 of BW 12, a reserve fund ratio will be applied to each NFIP policy, except PRPs and group flood insurance policies (GFIPs), effective on or after October 1, 2013. The reserve fund for policies effective on or after October 1, 2013 is 5% of the total premium.
- Effective January 1, 2014, the premium for non-principal/non-primary residences increases 25% per BW 12. This includes an increase in the reserve fund load to 5%.
We are providing this information as a way to help budget for future insurance renewals and acquisitions. If you have any questions or concerns, please feel free to contact Deland, Gibson
Blog Written by David W. D. Haynes
Business Development Coordinator
Deland, Gibson Insurance Associates
36 Washington Street, Suite 40
Wellesley Hills, MA 02481
Direct Line: (781) 239-7638
Fax: (781) 237-1805
E-mail: dhaynes@delandgibson.com
