Understanding the Impacts to Property Owners Reform Legislation to the National Flood Insurance Program (NFIP)
On Tuesday, May 5, 2015, Edie Lohmann, FEMA Region IX NFIP Insurance Specialist, joined the Arizona REALTORS® to conduct a webinar on the changes to the National Flood Insurance Program. Floods can happen anywhere and at any time and it is imperative that you as a REALTOR® know what to say about flood risk and flood insurance in order to help protect your customer’s new home.
President Obama, on March 21, 2014, signed the Homeowner Flood Insurance Affordability Act of 2014 into law. The law repealed and modified many of the provisions of the Biggert-Waters Flood Insurance Reform Act (Act) as well as made additional changes to other aspects not covered by the Act.
The new law lowers the recent rate increases on some policies, prevents some future rate increases and implements a surcharge on all policy holders. A policy for a primary residence will include a $25 surcharge and all other policies will include a $250 surcharge. The surcharges will continue to be collected, with limited exceptions, until all subsidies are eliminated.
For certain flood insurance policies affected by the Pre-Flood Insurance Rate Map (Pre-FIRM) subsidy elimination required by the Biggert-Waters Flood Insurance Reform Act, the change in law mandates refunds of the excess premiums that those policyholders were charged. The refunds will apply to policy holders in high-risk areas who were required to pay their full-risk rate after purchasing a new flood insurance policy on or after July 6, 2012. The refunds may apply to policy holders who renewed their policy after the Homeowners Flood Insurance Affordability Act was enacted on March 21, 2014 and whose premium increased more than 18 percent.
Additionally, the new law requires a gradual rate increase to properties now receiving artificially low (or subsidized) rates instead of immediate increases to full-risk rates required in certain cases under the Biggert-Waters Flood Insurance Reform Act. With limited exceptions, flood insurance premiums cannot increase by more than 18 percent annually.
For more information on the changes to the National Flood Insurance Program and how those changes will affect your client please visit:
Useful Client Links:
(Include the three documents that are attached to email.)