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“Not your parents flood program “.  www.floodsmart.gov – information for the National Flood Program. www.floodsmart.gov  www.txchart.com – digital flood.

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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:

1 “Not your parents flood program “

2  – 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

3  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

4  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.

5  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

6  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.

7  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.

8  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

9  Panic  Chaos  “What about my home value”  “Flood will become to expensive”  “This will destroy the economy of our community ”

10  Flood premiums going up over $25,000  Flood insurance to become unaffordable for most families  Communities struggle to afford flood insurance with new regulations.

11  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.

12  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.

13  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)

14  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.

15  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.

16  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.


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