Presentation on theme: "“Not your parents flood program “. www.floodsmart.gov – information for the National Flood Program. www.floodsmart.gov www.txchart.com – digital flood."— Presentation transcript:
“Not your parents flood program “
– information for the National Flood Program. – digital flood maps for the 17 coastal counties – flood map information for every county in the state of Texas and other states in the NFIP Region 6
Started in the 1968 Given to the WYO’s around 1983 (Mutual of Omaha) Doing fine until Hurricane Katrina (2005) and Sandy (2012) now almost $30 Billion in the red
Must do something to stabilize the Federal Flood program. Reforms based on removing subsidizes in the program. The two largest were the Pre-firm policies and “grandfathering” of polices to old rate maps in effect when house was built.
Section 205 removes subsidized rates Does away with the “pre-firm” rate zz (Oct 1, 2013) Rates given to houses built before Dec 1974 or date that the community came into the flood program. Rating was done without an elevation certificate with no under writing guidelines
3 step process New policies written after Oct 1, 2013 in an “A “zone or “V “ zone will have to have an elevation certificate no matter the date of construction. Retroactive back to July 6,2012 policies that originated after this date were being non-renewed and you will have to get an elevation certificate to continue coverage. Those who have a policy that originated before July 6, 2012 can keep them.
Those who can keep their “prefirm “ policy If that policy is on a secondary home or commercial structure they will take a 25% rate increase every year until they reach actuary rates on the structure. If it is your primary home your rate increase last Oct was 16% in an “A” zone and 17% in a “V” zone. If you sell your property the new buyer must get an elevation certificate to be rated.
Section 207 does away with “grandfathering” Basically says that if a new map comes to your area all policies must take the effects of the new map. Additional premiums will be phased in over a 5 year period at 20% per year. Added a 5% surcharge in A and V zone for catastrophe fund. BW-12
Panic Chaos “What about my home value” “Flood will become to expensive” “This will destroy the economy of our community ”
Flood premiums going up over $25,000 Flood insurance to become unaffordable for most families Communities struggle to afford flood insurance with new regulations.
Homeowner Flood Insurance Affordability Act effective June 1, 2014 Revives the Pre-firm policy back to rates that were in effect before Oct 1, Those who were affected by the change would be given their old policy rate back and given a refund. Adds a surcharge to each flood policy to pay for the subsidy.
Removed the section 207 from the Biggert- Waters Act of This allows “grandfathering” to stay as is within the flood program for the foreseeable future. Maintains the 25% premium increase for non-primary residential and commercial structures if written as pre-firm.
Establishes a rate increase structure Flood premiums must increase by 5% a year but not to exceed 18% a year. (under BW-12 there was only a 20% maximum cap)
Other residential more than 5 units (apartment buildings and nursing homes). Maximum building coverage was raised from $250,000 to $500,000 per building. Deductibles are being raised from $1,000 to $1,250 standard policy and pre-firm policy from $1,500 to $2,000. Based upon level of building coverage over $100,000.
All pre-firm policies will be moved to secondary status and if it is your primary residence you will have to show documentation to prove.
Bexar County map changed in New High Hazard zones were drawn. (A zones that are the 100 year flood plain.) Mortgage Protection Act will cause homeowners who have a mortgage in these areas to buy flood coverage.