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Monday, May 11, 2015

What You Need to Know About the Changes to the Homeowners Flood Insurance Affordability Act (HFIAA)

The National Flood Insurance Program put new reforms into effect on April 1, 2015. The changes are a requirement by the Homeowners Flood Insurance Affordability Act, which Congress passed and President Barack Obama signed into law in March 2014. The act repealed or modified some of the more strict regulations of the Biggert-Waters Flood Insurance Reform Act of 2012.
  • Surcharges vary between policyholders.  For new and renewed policies, there’s a surcharge of $25 for primary homeowners and $250 for non-primary homeowners, a title that goes to those who live in their home less than 50 percent of the year and non-residential properties.
  • Annual premiums may rise.  Depending on a property’s size, makeup and location, a resident could see their annual premium increases spike into double-digit percentages once the fees and surcharges are added.
  • Deductibles increase.  The residential deductible limit has now doubled to $10,000.
  • Special Flood Hazard Area homeowners should prepare for new FEMA Flood Maps.  Proposed changes under the FEMA flood maps now in appeal would put 1,463 buildings, or about 40 percent of the Marshfield’s homes and businesses, into the flood zone, some for the first time.  Buying into the policy before a new map effective date locks a homeowner into the preferred risk rate for the first year and transfers them to a newly mapped rate table for the second year.
Read more.

The ABIA has a Flood Insurance Task Force that examines the legislative and regulatory treatment of flood insurance policies issued by the National Flood Insurance Program (NFIP) and by insurers providing flood coverage as an excess or surplus line or on a forced order basis.  If you would like to join the ABIA Flood Insurance Task Force, please contact Sarah Ferman.