SlideShare a Scribd company logo
1 of 28
Download to read offline
Andrew Muller, CIC, AAI, PRIS
Private Client Insurance Advisor
Mappus Insurance Agency, Inc.
843.763.4200
www.MappusInsurance.com
Objectives
 Flood Insurance 101
 Flood insurance changes (BW-12) and what
realtors need to know
 How to help reduce flood insurance
premiums
The Basics
Flooding & Flood Risks
 Anywhere it rains, it can flood.
 Def: A flood is a general and temporary condition
where two or more acres of normally dry land or two or
more properties are partially or fully inundated by
water or mudflow…
 EVERYONE is in a flood zone…it is just a matter of
how severe or high hazard of a zone one is in.
Flood Insurance 101
 Coverage Limits: $250k for residential buildings,
$100k for contents. $500k for commercial buildings,
$500k for commercial contents.
 Replacement Cost is ONLY for single-family
dwellings that are primary residences. Otherwise, you
will receive an Actual Cash Value (ACV) settlement.
 B, C & X zones are low hazard flood zones and you
are not required to carry flood insurance if you have a
federally backed mortgage
 A & V Zones are high hazard zones and you are
required to carry flood insurance if you have a
federally-backed mortgage
Why Have Flood Insurance?
 To protect your assets from a loss
 To meet requirements (mortgage holder)
 Flood coverage is ALWAYS excluded from your home
insurance policy…always
 Living in Coastal areas like the Lowcountry present
higher chances of a flood occurring
 Would you not carry fire insurance? Auto liability
insurance?
Flood Insurance Stats and Facts
 You have a 26% chance of a flood occurring over the course of a
30 year mortgage life
 There is a 9% chance for a fire to occur
 You are more likely to have a flood than your home burglarized
 You are more likely to have a flood than your car stolen
 90% of all Presidentially declared disasters involved flooding
 Non-High Hazard Flood zones (X zones) represent 20% of all
flood insurance claims
 The average residential flood claim was $30,000 from 2007-2011
 The average standard A Zone flood insurance policy costs about
$600
 Roughly 20% of all flood policies use subsidized rates yet cause
the most claims payouts
How Are Rates Determined?
 Lots of factors determine flood insurance rates. These
include:
 flood zone (X, A & V Zones)
 amount of coverage requested (i.e. $250,000 for Building)
 location of structure
 age and design of structure
 building occupancy (Residential, single family, multi family)
 structure elevation if located in a Special Flood Hazard
Area (raised, slab, crawlspace…)
What is Biggert-Waters
(BF-12) and What are
they doing with the
Flood Insurance
Program???
Biggert-Waters Reform Act of 2012
 Over the years, costs and consequences of flooding
have continued to increase
 Super Storm Sandy
 Hurricane Katrina
 Reconstruction Costs, Inflation…
 For the NFIP to remain sustainable, the premium
structure must reflect the true risks and costs of
flooding
 Proposed changes are designed to increase the fiscal
soundness of the National Flood Insurance Program
What are Subsidized Rates?
 Reduced rates that are below the actuarially sound
rates that should be given to a specific property
 Helps provide affordable insurance to protect from
flood related losses
 Within the NFIP program, subsidized rates are most
commonly applied to structures built Pre-FIRM
 Built prior to 1975 in many communities;
 Charleston County 1971 (joined NFIP)
 Dorchester County 1982
 Berkeley County 1983
 Built prior to the initial Flood Insurance Rate Map
(FIRM) which varies by community
Changes Coming Down the Pipeline
 Premium Increases (avg. 10% across the board)
 No extension of subsidy for New Pre-FIRM Policies or
Lapsed Pre-FIRM policies
 Current Pre-FIRM policies will start seeing increases
annually till the full risk rate is achieved
 What is the “full risk rate” you ask?
 Elimination of No Waiting Period due to Lender
Requirement (except for NEW home loans)
Premium Increases
Overall average
increase of 10%
 25% premium increases
for certain Pre-FIRM
policies
 Non-primary residences
 Severe Repetitive Loss
(SRL) properties
 Business properties
 V Zones
 Post-FIRM = 11%
 Pre-FIRM = 17%
 A Zones
 Post-FIRM 6%
 Pre-FIRM AE zones = 16%
 X Zones
 Standard rated policies =
8%
 Preferred Risk Policies
(PRP) = average of 1%
***NFIP has not given any specifics as to a ceiling on the level the
rate will rise to, so anticipate these rates to increase every year at
this rate
What Qualifies For A Direct
Move to Full-Risk Rates
 After the sale/purchase of a property
 Subsidized rates can no longer be assigned to the new owner
 After a policy lapse
 Will be costly if this happens…don’t let it happen
 Sometimes happens in error when a client moves but house is
still for sale
 New policy is issued
 Policies for buildings that are uninsured as of 7/6/12 or later
 Elevation Certificates
 You also must present an elevation certificate to establish a
basis. EC’s cost anywhere from $350-$750
 Mappus Insurance has negotiated a special rate with Atlantic
Surveying, Inc. Find coupon on our website.
30 Day Waiting Period
 Impacts policies where there is a loan on a structure in
a Special Flood Hazard Area (SFHA)
 Zones beginning with A or V
 Lender determines a flood insurance policy has not
been issued
 Structure owner is required to purchase a flood
insurance policy
 30 day waiting period will be imposed on these new
business policies
***This does not affect NEW loans
How Can You Help Prepare
Your Buyers and Sellers?
 These new changes can dramatically affect the buying
power for a home purchase AND the purchase price
 Get an Elevation Certificate. KNOW WHAT YOU &
CLIENTS ARE BUYING
 Determines your Post-Firm rates
 Possibly a buying/selling feature
 Contact a competent insurance agency immediately to
work with your client
 Always recommend flood insurance
Saving Money On Flood Insurance
 Use of Higher Deductibles
 Cover Building ONLY, No Contents
 Consider Elevation (example on next page)
 Apply breakaway walls or openings/ventilation (1 sq.
in. per 1 sq. ft. of floor)
 Ensure all enclosure areas are for parking, storage and
building access ONLY. Cannot be furnished.
 If renovations have been made, verify with the town/city
that all permits, requirements and laws were followed.
This can be very costly and an E&O claim against real
estate agents.
CTAR Lunch & Learn: 2013 Flood Insurance Changes
CTAR Lunch & Learn: 2013 Flood Insurance Changes
CTAR Lunch & Learn: 2013 Flood Insurance Changes
CTAR Lunch & Learn: 2013 Flood Insurance Changes
CTAR Lunch & Learn: 2013 Flood Insurance Changes
CTAR Lunch & Learn: 2013 Flood Insurance Changes
Other Things To Come
 Grandfathering will be going away in the future.
 These are post-firm homes that were built to compliance
at the time it was built but laws have changed since.
 Their rates do not reflect current actuarial rates
 Date is unknown but expected sometime in 2014. Rates
will be phased-in
 Could get delayed……
 Flood zones are currently being remapped and are set
to change in May 2015
 Could get delayed……
In Closing
 Get an Elevation Certificate
 Go to MappusInsurance.com for coupon
 Work with a competent insurance agent
 Create a great customer experience
How To Contact Andrew
Andrew Muller, CIC, AAI, PRIS
843.714.9389 Cell
843.763.4200 Office
Andrew@MappusInsurance.com
www.MappusInsurance.com
Want to stay current on flood insurance and other home
insurance tips and strategies for your clients to help reduce
their risks and premium?
Email Andrew with the subject line “CTAR Flood Presentation”
and you will be entered to win a $50 Gift Card to Maverick
Restaurant Group
What the Association of REALTORS® is doing:
WORKING WITH U.S. HOUSE OF REPRESENTATIVES: With NAR’s support, Reps. Bill Cassidy
(R-LA) and Maxine Waters (D-CA) have successfully passed out of the House an amendment to the
Homeland Security Appropriations Bill to delay removal of “grandfathered” flood insurance rates
for one year. This will provide FEMA with additional time to complete the “Biggert-Waters”
affordability study and report to Congress on the impact of this and other rate reforms.
Congressman Mark Sanford voted for the amendment.
SENATE HAS YET TO ACT; DELAY IS NOT LAW
WORKING WITH U.S. SENATE: United States Senators Mary Landrieu (D-LA) and David Vitter
(R-LA) are working with NAR to include the delay in the Senate version of the Homeland Security
Appropriations Bill, and also expand it to include the other rate provisions effective October
1st which will start impacting home purchases later this year. Senate has not yet voted on
amendment.
AMENDMENT FOR DELAY ONLY FOR GRANDFATHERING
The law’s other phase-outs -- for older second homes and business properties and for homes
purchased after July 2012 – will continue to take effect on October 1, 2013. NAR is working on a
longer delay and expanding it to include the other subsidy phase-outs, in addition to grandfathered
properties.
MORE ON WHAT REALTOR® ASSOCIATION IS DOING FOR YOU:
FEMA is developing an affordability study in a report to Congress. NAR is working with FEMA to
provide the data we receive from our survey. NAR successfully advocated for the study’s inclusion in
the five year bill.
CITIES can lower their flood insurance premiums for their entire jurisdiction by sometimes just as
simple as filling out paperwork through the Community Rating System (CRS). CTAR will be
working with cities over the next year to ensure they’re doing all they can to improve their
community rating.
CONGRESSIONAL STAFF SYMPOSIUM: NAR, in cooperation with the American Bankers
Association and the National Association of Home Builders, held a flood insurance forum for
Members of Congress and congressional staff. The purpose of the forum is to educate Congress on
the coming changes required under the Biggert-Waters legislation and discuss legislative and
regulatory options currently under discussion. COMPLETED
U.S. SENATE BANKING COMMITTEE: Conducted a hearing on the affordability of the NFIP rate
provisions. COMPLETED

More Related Content

What's hot

allstate Quarter Information 2007 2nd
allstate Quarter Information 2007 2ndallstate Quarter Information 2007 2nd
allstate Quarter Information 2007 2ndfinance7
 
Kfs ilit
Kfs ilitKfs ilit
Kfs ilitroowah1
 
Protect Your Assets Through A Living Trust
Protect Your Assets Through A Living TrustProtect Your Assets Through A Living Trust
Protect Your Assets Through A Living TrustLaughlin Associates
 
Using Life Insurance in Zero Tax Estate Planning
Using Life Insurance in Zero Tax Estate PlanningUsing Life Insurance in Zero Tax Estate Planning
Using Life Insurance in Zero Tax Estate Planningwardwilsey
 
Life Insurance And Estate Tax Presentation
Life Insurance And Estate Tax PresentationLife Insurance And Estate Tax Presentation
Life Insurance And Estate Tax PresentationCharles Knox
 

What's hot (8)

allstate Quarter Information 2007 2nd
allstate Quarter Information 2007 2ndallstate Quarter Information 2007 2nd
allstate Quarter Information 2007 2nd
 
Final expense
Final expenseFinal expense
Final expense
 
Kfs ilit
Kfs ilitKfs ilit
Kfs ilit
 
Bankruptcy Basics Slideshow
Bankruptcy Basics SlideshowBankruptcy Basics Slideshow
Bankruptcy Basics Slideshow
 
Protect Your Assets Through A Living Trust
Protect Your Assets Through A Living TrustProtect Your Assets Through A Living Trust
Protect Your Assets Through A Living Trust
 
Taming a Bear Market in Retirement
Taming a Bear Market in RetirementTaming a Bear Market in Retirement
Taming a Bear Market in Retirement
 
Using Life Insurance in Zero Tax Estate Planning
Using Life Insurance in Zero Tax Estate PlanningUsing Life Insurance in Zero Tax Estate Planning
Using Life Insurance in Zero Tax Estate Planning
 
Life Insurance And Estate Tax Presentation
Life Insurance And Estate Tax PresentationLife Insurance And Estate Tax Presentation
Life Insurance And Estate Tax Presentation
 

Similar to CTAR Lunch & Learn: 2013 Flood Insurance Changes

As Risks Go, Flood Beats Fire 5 to 1
As Risks Go, Flood Beats Fire 5 to 1As Risks Go, Flood Beats Fire 5 to 1
As Risks Go, Flood Beats Fire 5 to 1CBIZ, Inc.
 
Top-Floor-Insurance_A-Buyers-Guide
Top-Floor-Insurance_A-Buyers-GuideTop-Floor-Insurance_A-Buyers-Guide
Top-Floor-Insurance_A-Buyers-GuideAl Warden, CIC
 
Ben Neville - Managing Risk on the Farm
Ben Neville - Managing Risk on the FarmBen Neville - Managing Risk on the Farm
Ben Neville - Managing Risk on the FarmJohn Blue
 
Burnett preparing for nk rising tides-091913
Burnett preparing for nk rising tides-091913Burnett preparing for nk rising tides-091913
Burnett preparing for nk rising tides-091913riseagrant
 
Appraisals & Flood Insurance | a continued challenge for financial institutions
Appraisals & Flood Insurance | a continued challenge for financial institutionsAppraisals & Flood Insurance | a continued challenge for financial institutions
Appraisals & Flood Insurance | a continued challenge for financial institutionsCarl Streck
 
'The role of insurance and reinsurance in disaster risk management'
'The role of insurance and reinsurance in disaster risk management''The role of insurance and reinsurance in disaster risk management'
'The role of insurance and reinsurance in disaster risk management'UNDP Climate
 
Insuring Your Real Estate Investment Success
Insuring Your Real Estate Investment SuccessInsuring Your Real Estate Investment Success
Insuring Your Real Estate Investment SuccessVolition Properties
 
Managing Insurance Coverages & Costs – Your Hands Aren’t Tied
Managing Insurance Coverages & Costs – Your Hands Aren’t TiedManaging Insurance Coverages & Costs – Your Hands Aren’t Tied
Managing Insurance Coverages & Costs – Your Hands Aren’t TiedCBIZ, Inc.
 
Flood Insurance Update 11/2013
Flood Insurance Update 11/2013Flood Insurance Update 11/2013
Flood Insurance Update 11/2013Jenny Stilley
 
Flooding - A Business RIsk Mitigated by Planning and Insurance
Flooding - A Business RIsk Mitigated by Planning and InsuranceFlooding - A Business RIsk Mitigated by Planning and Insurance
Flooding - A Business RIsk Mitigated by Planning and InsuranceCBIZ, Inc.
 
P&C Market Outlook: 2020 Insurance Planning Insights
P&C Market Outlook: 2020 Insurance Planning Insights P&C Market Outlook: 2020 Insurance Planning Insights
P&C Market Outlook: 2020 Insurance Planning Insights CBIZ, Inc.
 
Rebuilding after-sandy-factsheet
Rebuilding after-sandy-factsheetRebuilding after-sandy-factsheet
Rebuilding after-sandy-factsheetOceanCityGazette
 

Similar to CTAR Lunch & Learn: 2013 Flood Insurance Changes (20)

National Flood Insurance Program: The New FEMA Guidelines
National Flood Insurance Program: The New FEMA GuidelinesNational Flood Insurance Program: The New FEMA Guidelines
National Flood Insurance Program: The New FEMA Guidelines
 
As Risks Go, Flood Beats Fire 5 to 1
As Risks Go, Flood Beats Fire 5 to 1As Risks Go, Flood Beats Fire 5 to 1
As Risks Go, Flood Beats Fire 5 to 1
 
Top-Floor-Insurance_A-Buyers-Guide
Top-Floor-Insurance_A-Buyers-GuideTop-Floor-Insurance_A-Buyers-Guide
Top-Floor-Insurance_A-Buyers-Guide
 
Ben Neville - Managing Risk on the Farm
Ben Neville - Managing Risk on the FarmBen Neville - Managing Risk on the Farm
Ben Neville - Managing Risk on the Farm
 
01-16-Composite_64pages_red
01-16-Composite_64pages_red01-16-Composite_64pages_red
01-16-Composite_64pages_red
 
Burnett preparing for nk rising tides-091913
Burnett preparing for nk rising tides-091913Burnett preparing for nk rising tides-091913
Burnett preparing for nk rising tides-091913
 
Appraisals & Flood Insurance | a continued challenge for financial institutions
Appraisals & Flood Insurance | a continued challenge for financial institutionsAppraisals & Flood Insurance | a continued challenge for financial institutions
Appraisals & Flood Insurance | a continued challenge for financial institutions
 
'The role of insurance and reinsurance in disaster risk management'
'The role of insurance and reinsurance in disaster risk management''The role of insurance and reinsurance in disaster risk management'
'The role of insurance and reinsurance in disaster risk management'
 
Allen CAI Article
Allen CAI ArticleAllen CAI Article
Allen CAI Article
 
HOW DO YOU Rate [Autosaved]
HOW DO YOU Rate [Autosaved]HOW DO YOU Rate [Autosaved]
HOW DO YOU Rate [Autosaved]
 
Insuring Your Real Estate Investment Success
Insuring Your Real Estate Investment SuccessInsuring Your Real Estate Investment Success
Insuring Your Real Estate Investment Success
 
Flood Insurance FAQ
Flood Insurance FAQFlood Insurance FAQ
Flood Insurance FAQ
 
Managing Insurance Coverages & Costs – Your Hands Aren’t Tied
Managing Insurance Coverages & Costs – Your Hands Aren’t TiedManaging Insurance Coverages & Costs – Your Hands Aren’t Tied
Managing Insurance Coverages & Costs – Your Hands Aren’t Tied
 
Flood Insurance Update 11/2013
Flood Insurance Update 11/2013Flood Insurance Update 11/2013
Flood Insurance Update 11/2013
 
Flooding - A Business RIsk Mitigated by Planning and Insurance
Flooding - A Business RIsk Mitigated by Planning and InsuranceFlooding - A Business RIsk Mitigated by Planning and Insurance
Flooding - A Business RIsk Mitigated by Planning and Insurance
 
P&C Market Outlook: 2020 Insurance Planning Insights
P&C Market Outlook: 2020 Insurance Planning Insights P&C Market Outlook: 2020 Insurance Planning Insights
P&C Market Outlook: 2020 Insurance Planning Insights
 
WHY Insure Floridians (DIG)
WHY Insure Floridians (DIG)WHY Insure Floridians (DIG)
WHY Insure Floridians (DIG)
 
Flood Ins Faq
Flood Ins FaqFlood Ins Faq
Flood Ins Faq
 
Rebuilding after-sandy-factsheet
Rebuilding after-sandy-factsheetRebuilding after-sandy-factsheet
Rebuilding after-sandy-factsheet
 
Elmwood insurance review
Elmwood insurance reviewElmwood insurance review
Elmwood insurance review
 

More from Charleston Trident Association of REALTORS

More from Charleston Trident Association of REALTORS (20)

2024 Residential Market Update Slides - Dr. Von Nessen
2024 Residential Market Update Slides - Dr. Von Nessen2024 Residential Market Update Slides - Dr. Von Nessen
2024 Residential Market Update Slides - Dr. Von Nessen
 
CTAR 2022 Year in Review | Residential Market Update
CTAR 2022 Year in Review | Residential Market UpdateCTAR 2022 Year in Review | Residential Market Update
CTAR 2022 Year in Review | Residential Market Update
 
2020 RPAC Investor Presentation
2020 RPAC Investor Presentation 2020 RPAC Investor Presentation
2020 RPAC Investor Presentation
 
2021 CTAR Residential Market Update with Dr. Joseph Von Nessen
2021 CTAR Residential Market Update with Dr. Joseph Von Nessen2021 CTAR Residential Market Update with Dr. Joseph Von Nessen
2021 CTAR Residential Market Update with Dr. Joseph Von Nessen
 
CID December Meeting | Commercial Market Forecast
CID December Meeting | Commercial Market ForecastCID December Meeting | Commercial Market Forecast
CID December Meeting | Commercial Market Forecast
 
2020 CTAR Residential Real Estate Market Update
2020 CTAR Residential Real Estate Market Update2020 CTAR Residential Real Estate Market Update
2020 CTAR Residential Real Estate Market Update
 
2019 CMF Office
2019 CMF Office 2019 CMF Office
2019 CMF Office
 
2019 CMF Multi Family
2019 CMF Multi Family2019 CMF Multi Family
2019 CMF Multi Family
 
CMF 2019 Troy Miller
CMF 2019 Troy MillerCMF 2019 Troy Miller
CMF 2019 Troy Miller
 
CMF 2019 Kimberly Goetz
CMF 2019 Kimberly GoetzCMF 2019 Kimberly Goetz
CMF 2019 Kimberly Goetz
 
CMF 2019 Dr. Yun Forecast
CMF 2019 Dr. Yun ForecastCMF 2019 Dr. Yun Forecast
CMF 2019 Dr. Yun Forecast
 
CMF 2019 Dr. Yun Power Point
CMF 2019 Dr. Yun Power PointCMF 2019 Dr. Yun Power Point
CMF 2019 Dr. Yun Power Point
 
Charleston Commercial Market Forecast | Derek Mathis Update
Charleston Commercial Market Forecast | Derek Mathis UpdateCharleston Commercial Market Forecast | Derek Mathis Update
Charleston Commercial Market Forecast | Derek Mathis Update
 
Charleston Commercial Market Forecast | Mack Reese
Charleston Commercial Market Forecast | Mack ReeseCharleston Commercial Market Forecast | Mack Reese
Charleston Commercial Market Forecast | Mack Reese
 
Charleston Commercial Market Forecast | Lawrence Yun Economic Update
Charleston Commercial Market Forecast | Lawrence Yun Economic UpdateCharleston Commercial Market Forecast | Lawrence Yun Economic Update
Charleston Commercial Market Forecast | Lawrence Yun Economic Update
 
2017 Retail
2017 Retail2017 Retail
2017 Retail
 
2017 Office
2017 Office2017 Office
2017 Office
 
2017 Industrial
2017 Industrial2017 Industrial
2017 Industrial
 
2017 Hospitality
2017 Hospitality2017 Hospitality
2017 Hospitality
 
Economic Outlook
Economic OutlookEconomic Outlook
Economic Outlook
 

Recently uploaded

Mantra Akrudi Pune | Lifestyle Amenities Rethink Luxury
Mantra Akrudi Pune | Lifestyle Amenities Rethink LuxuryMantra Akrudi Pune | Lifestyle Amenities Rethink Luxury
Mantra Akrudi Pune | Lifestyle Amenities Rethink Luxuryaidasheikh47
 
Anshul Kanvas Wagholi Pune Apartments Brochure.pdf
Anshul Kanvas Wagholi Pune Apartments Brochure.pdfAnshul Kanvas Wagholi Pune Apartments Brochure.pdf
Anshul Kanvas Wagholi Pune Apartments Brochure.pdfsabhyara24
 
Commercial Lots for Sale - Pederson Crossing Blvd., DeForest,WI
Commercial Lots for Sale - Pederson Crossing Blvd., DeForest,WICommercial Lots for Sale - Pederson Crossing Blvd., DeForest,WI
Commercial Lots for Sale - Pederson Crossing Blvd., DeForest,WILee & Associates of Madison, WI
 
2 BHK Flats In Zirakpur For Sale - AJ Estates
2 BHK Flats In Zirakpur For Sale - AJ Estates2 BHK Flats In Zirakpur For Sale - AJ Estates
2 BHK Flats In Zirakpur For Sale - AJ EstatesAJ Estates
 
Provident Manchester IVC Road Bangalore.pdf
Provident Manchester IVC Road Bangalore.pdfProvident Manchester IVC Road Bangalore.pdf
Provident Manchester IVC Road Bangalore.pdfashiyadav24
 
Acqua Eden Bhutani Goa Brochure Download
Acqua Eden Bhutani Goa Brochure DownloadAcqua Eden Bhutani Goa Brochure Download
Acqua Eden Bhutani Goa Brochure DownloadMKBInfotech
 
SVN Live 3.25.24 Weekly Property Broadcast
SVN Live 3.25.24 Weekly Property BroadcastSVN Live 3.25.24 Weekly Property Broadcast
SVN Live 3.25.24 Weekly Property BroadcastSVN International Corp.
 
Shapoorji Pallonji Codename Evolve Pine Bangalore.pdf
Shapoorji Pallonji Codename Evolve Pine Bangalore.pdfShapoorji Pallonji Codename Evolve Pine Bangalore.pdf
Shapoorji Pallonji Codename Evolve Pine Bangalore.pdfashiyadav24
 
Evolving Work Trends Require New-age Businesses to Design Thoughtful Workspac...
Evolving Work Trends Require New-age Businesses to Design Thoughtful Workspac...Evolving Work Trends Require New-age Businesses to Design Thoughtful Workspac...
Evolving Work Trends Require New-age Businesses to Design Thoughtful Workspac...GMRAerocityHyderabad
 
Mahindra Lifespaces Kandivali East | Expansive spaces for your family
Mahindra Lifespaces Kandivali East | Expansive spaces for your familyMahindra Lifespaces Kandivali East | Expansive spaces for your family
Mahindra Lifespaces Kandivali East | Expansive spaces for your familyaidasheikh47
 
Signature Global Sector 84 In Gurugram | Easy Living
Signature Global Sector 84 In Gurugram | Easy LivingSignature Global Sector 84 In Gurugram | Easy Living
Signature Global Sector 84 In Gurugram | Easy Livingbhattrishabh270
 
LCAR Unit 15 - Agency in Real Estate - 14th Edition Revised
LCAR Unit 15 - Agency in Real Estate - 14th Edition RevisedLCAR Unit 15 - Agency in Real Estate - 14th Edition Revised
LCAR Unit 15 - Agency in Real Estate - 14th Edition RevisedTom Blefko
 
4 & 5 BHK Spacious Apartments for sale in Anamika High Point, Off SG Highway ...
4 & 5 BHK Spacious Apartments for sale in Anamika High Point, Off SG Highway ...4 & 5 BHK Spacious Apartments for sale in Anamika High Point, Off SG Highway ...
4 & 5 BHK Spacious Apartments for sale in Anamika High Point, Off SG Highway ...RE/MAX Realty Solutions
 
3 BHK Flats in Zirakpur for Sale - AJ Estates
3 BHK Flats in Zirakpur for Sale - AJ Estates3 BHK Flats in Zirakpur for Sale - AJ Estates
3 BHK Flats in Zirakpur for Sale - AJ EstatesAJ Estates
 
Birla-Alokya Whitefield, Banglore-e-Brochure.pdf
Birla-Alokya Whitefield, Banglore-e-Brochure.pdfBirla-Alokya Whitefield, Banglore-e-Brochure.pdf
Birla-Alokya Whitefield, Banglore-e-Brochure.pdffaheemali990101
 
AIPL Joy District Sector 88, In Gurgaon.pdf
AIPL Joy District  Sector 88,  In Gurgaon.pdfAIPL Joy District  Sector 88,  In Gurgaon.pdf
AIPL Joy District Sector 88, In Gurgaon.pdfbhattrishabh270
 
Top 6 Ways to Stay Stay in Touch and Generate Leads
Top 6 Ways to Stay Stay in Touch and Generate LeadsTop 6 Ways to Stay Stay in Touch and Generate Leads
Top 6 Ways to Stay Stay in Touch and Generate LeadsAaron Stelle
 
Kalpataru Jade Skyline Baner Pune | A New Way Of Living At An Affordable Price
Kalpataru Jade Skyline Baner Pune | A New Way Of Living At An Affordable PriceKalpataru Jade Skyline Baner Pune | A New Way Of Living At An Affordable Price
Kalpataru Jade Skyline Baner Pune | A New Way Of Living At An Affordable Priceaidasheikh47
 

Recently uploaded (20)

Mantra Akrudi Pune | Lifestyle Amenities Rethink Luxury
Mantra Akrudi Pune | Lifestyle Amenities Rethink LuxuryMantra Akrudi Pune | Lifestyle Amenities Rethink Luxury
Mantra Akrudi Pune | Lifestyle Amenities Rethink Luxury
 
Anshul Kanvas Wagholi Pune Apartments Brochure.pdf
Anshul Kanvas Wagholi Pune Apartments Brochure.pdfAnshul Kanvas Wagholi Pune Apartments Brochure.pdf
Anshul Kanvas Wagholi Pune Apartments Brochure.pdf
 
Commercial Lots for Sale - Pederson Crossing Blvd., DeForest,WI
Commercial Lots for Sale - Pederson Crossing Blvd., DeForest,WICommercial Lots for Sale - Pederson Crossing Blvd., DeForest,WI
Commercial Lots for Sale - Pederson Crossing Blvd., DeForest,WI
 
2 BHK Flats In Zirakpur For Sale - AJ Estates
2 BHK Flats In Zirakpur For Sale - AJ Estates2 BHK Flats In Zirakpur For Sale - AJ Estates
2 BHK Flats In Zirakpur For Sale - AJ Estates
 
Provident Manchester IVC Road Bangalore.pdf
Provident Manchester IVC Road Bangalore.pdfProvident Manchester IVC Road Bangalore.pdf
Provident Manchester IVC Road Bangalore.pdf
 
Things to keep in mind while buying property.
Things to keep in mind while buying property.Things to keep in mind while buying property.
Things to keep in mind while buying property.
 
Acqua Eden Bhutani Goa Brochure Download
Acqua Eden Bhutani Goa Brochure DownloadAcqua Eden Bhutani Goa Brochure Download
Acqua Eden Bhutani Goa Brochure Download
 
SVN Live 3.25.24 Weekly Property Broadcast
SVN Live 3.25.24 Weekly Property BroadcastSVN Live 3.25.24 Weekly Property Broadcast
SVN Live 3.25.24 Weekly Property Broadcast
 
Shapoorji Pallonji Codename Evolve Pine Bangalore.pdf
Shapoorji Pallonji Codename Evolve Pine Bangalore.pdfShapoorji Pallonji Codename Evolve Pine Bangalore.pdf
Shapoorji Pallonji Codename Evolve Pine Bangalore.pdf
 
Evolving Work Trends Require New-age Businesses to Design Thoughtful Workspac...
Evolving Work Trends Require New-age Businesses to Design Thoughtful Workspac...Evolving Work Trends Require New-age Businesses to Design Thoughtful Workspac...
Evolving Work Trends Require New-age Businesses to Design Thoughtful Workspac...
 
Mahindra Lifespaces Kandivali East | Expansive spaces for your family
Mahindra Lifespaces Kandivali East | Expansive spaces for your familyMahindra Lifespaces Kandivali East | Expansive spaces for your family
Mahindra Lifespaces Kandivali East | Expansive spaces for your family
 
Signature Global Sector 84 In Gurugram | Easy Living
Signature Global Sector 84 In Gurugram | Easy LivingSignature Global Sector 84 In Gurugram | Easy Living
Signature Global Sector 84 In Gurugram | Easy Living
 
LCAR Unit 15 - Agency in Real Estate - 14th Edition Revised
LCAR Unit 15 - Agency in Real Estate - 14th Edition RevisedLCAR Unit 15 - Agency in Real Estate - 14th Edition Revised
LCAR Unit 15 - Agency in Real Estate - 14th Edition Revised
 
4 & 5 BHK Spacious Apartments for sale in Anamika High Point, Off SG Highway ...
4 & 5 BHK Spacious Apartments for sale in Anamika High Point, Off SG Highway ...4 & 5 BHK Spacious Apartments for sale in Anamika High Point, Off SG Highway ...
4 & 5 BHK Spacious Apartments for sale in Anamika High Point, Off SG Highway ...
 
3 BHK Flats in Zirakpur for Sale - AJ Estates
3 BHK Flats in Zirakpur for Sale - AJ Estates3 BHK Flats in Zirakpur for Sale - AJ Estates
3 BHK Flats in Zirakpur for Sale - AJ Estates
 
Birla-Alokya Whitefield, Banglore-e-Brochure.pdf
Birla-Alokya Whitefield, Banglore-e-Brochure.pdfBirla-Alokya Whitefield, Banglore-e-Brochure.pdf
Birla-Alokya Whitefield, Banglore-e-Brochure.pdf
 
AIPL Joy District Sector 88, In Gurgaon.pdf
AIPL Joy District  Sector 88,  In Gurgaon.pdfAIPL Joy District  Sector 88,  In Gurgaon.pdf
AIPL Joy District Sector 88, In Gurgaon.pdf
 
Top 6 Ways to Stay Stay in Touch and Generate Leads
Top 6 Ways to Stay Stay in Touch and Generate LeadsTop 6 Ways to Stay Stay in Touch and Generate Leads
Top 6 Ways to Stay Stay in Touch and Generate Leads
 
Benefits of buying ready to move in flats.
Benefits of buying ready to move in flats.Benefits of buying ready to move in flats.
Benefits of buying ready to move in flats.
 
Kalpataru Jade Skyline Baner Pune | A New Way Of Living At An Affordable Price
Kalpataru Jade Skyline Baner Pune | A New Way Of Living At An Affordable PriceKalpataru Jade Skyline Baner Pune | A New Way Of Living At An Affordable Price
Kalpataru Jade Skyline Baner Pune | A New Way Of Living At An Affordable Price
 

CTAR Lunch & Learn: 2013 Flood Insurance Changes

  • 1. Andrew Muller, CIC, AAI, PRIS Private Client Insurance Advisor Mappus Insurance Agency, Inc. 843.763.4200 www.MappusInsurance.com
  • 2. Objectives  Flood Insurance 101  Flood insurance changes (BW-12) and what realtors need to know  How to help reduce flood insurance premiums
  • 4. Flooding & Flood Risks  Anywhere it rains, it can flood.  Def: A flood is a general and temporary condition where two or more acres of normally dry land or two or more properties are partially or fully inundated by water or mudflow…  EVERYONE is in a flood zone…it is just a matter of how severe or high hazard of a zone one is in.
  • 5. Flood Insurance 101  Coverage Limits: $250k for residential buildings, $100k for contents. $500k for commercial buildings, $500k for commercial contents.  Replacement Cost is ONLY for single-family dwellings that are primary residences. Otherwise, you will receive an Actual Cash Value (ACV) settlement.  B, C & X zones are low hazard flood zones and you are not required to carry flood insurance if you have a federally backed mortgage  A & V Zones are high hazard zones and you are required to carry flood insurance if you have a federally-backed mortgage
  • 6. Why Have Flood Insurance?  To protect your assets from a loss  To meet requirements (mortgage holder)  Flood coverage is ALWAYS excluded from your home insurance policy…always  Living in Coastal areas like the Lowcountry present higher chances of a flood occurring  Would you not carry fire insurance? Auto liability insurance?
  • 7. Flood Insurance Stats and Facts  You have a 26% chance of a flood occurring over the course of a 30 year mortgage life  There is a 9% chance for a fire to occur  You are more likely to have a flood than your home burglarized  You are more likely to have a flood than your car stolen  90% of all Presidentially declared disasters involved flooding  Non-High Hazard Flood zones (X zones) represent 20% of all flood insurance claims  The average residential flood claim was $30,000 from 2007-2011  The average standard A Zone flood insurance policy costs about $600  Roughly 20% of all flood policies use subsidized rates yet cause the most claims payouts
  • 8. How Are Rates Determined?  Lots of factors determine flood insurance rates. These include:  flood zone (X, A & V Zones)  amount of coverage requested (i.e. $250,000 for Building)  location of structure  age and design of structure  building occupancy (Residential, single family, multi family)  structure elevation if located in a Special Flood Hazard Area (raised, slab, crawlspace…)
  • 9. What is Biggert-Waters (BF-12) and What are they doing with the Flood Insurance Program???
  • 10. Biggert-Waters Reform Act of 2012  Over the years, costs and consequences of flooding have continued to increase  Super Storm Sandy  Hurricane Katrina  Reconstruction Costs, Inflation…  For the NFIP to remain sustainable, the premium structure must reflect the true risks and costs of flooding  Proposed changes are designed to increase the fiscal soundness of the National Flood Insurance Program
  • 11. What are Subsidized Rates?  Reduced rates that are below the actuarially sound rates that should be given to a specific property  Helps provide affordable insurance to protect from flood related losses  Within the NFIP program, subsidized rates are most commonly applied to structures built Pre-FIRM  Built prior to 1975 in many communities;  Charleston County 1971 (joined NFIP)  Dorchester County 1982  Berkeley County 1983  Built prior to the initial Flood Insurance Rate Map (FIRM) which varies by community
  • 12. Changes Coming Down the Pipeline  Premium Increases (avg. 10% across the board)  No extension of subsidy for New Pre-FIRM Policies or Lapsed Pre-FIRM policies  Current Pre-FIRM policies will start seeing increases annually till the full risk rate is achieved  What is the “full risk rate” you ask?  Elimination of No Waiting Period due to Lender Requirement (except for NEW home loans)
  • 13. Premium Increases Overall average increase of 10%  25% premium increases for certain Pre-FIRM policies  Non-primary residences  Severe Repetitive Loss (SRL) properties  Business properties  V Zones  Post-FIRM = 11%  Pre-FIRM = 17%  A Zones  Post-FIRM 6%  Pre-FIRM AE zones = 16%  X Zones  Standard rated policies = 8%  Preferred Risk Policies (PRP) = average of 1% ***NFIP has not given any specifics as to a ceiling on the level the rate will rise to, so anticipate these rates to increase every year at this rate
  • 14. What Qualifies For A Direct Move to Full-Risk Rates  After the sale/purchase of a property  Subsidized rates can no longer be assigned to the new owner  After a policy lapse  Will be costly if this happens…don’t let it happen  Sometimes happens in error when a client moves but house is still for sale  New policy is issued  Policies for buildings that are uninsured as of 7/6/12 or later  Elevation Certificates  You also must present an elevation certificate to establish a basis. EC’s cost anywhere from $350-$750  Mappus Insurance has negotiated a special rate with Atlantic Surveying, Inc. Find coupon on our website.
  • 15. 30 Day Waiting Period  Impacts policies where there is a loan on a structure in a Special Flood Hazard Area (SFHA)  Zones beginning with A or V  Lender determines a flood insurance policy has not been issued  Structure owner is required to purchase a flood insurance policy  30 day waiting period will be imposed on these new business policies ***This does not affect NEW loans
  • 16. How Can You Help Prepare Your Buyers and Sellers?  These new changes can dramatically affect the buying power for a home purchase AND the purchase price  Get an Elevation Certificate. KNOW WHAT YOU & CLIENTS ARE BUYING  Determines your Post-Firm rates  Possibly a buying/selling feature  Contact a competent insurance agency immediately to work with your client  Always recommend flood insurance
  • 17. Saving Money On Flood Insurance  Use of Higher Deductibles  Cover Building ONLY, No Contents  Consider Elevation (example on next page)  Apply breakaway walls or openings/ventilation (1 sq. in. per 1 sq. ft. of floor)  Ensure all enclosure areas are for parking, storage and building access ONLY. Cannot be furnished.  If renovations have been made, verify with the town/city that all permits, requirements and laws were followed. This can be very costly and an E&O claim against real estate agents.
  • 24. Other Things To Come  Grandfathering will be going away in the future.  These are post-firm homes that were built to compliance at the time it was built but laws have changed since.  Their rates do not reflect current actuarial rates  Date is unknown but expected sometime in 2014. Rates will be phased-in  Could get delayed……  Flood zones are currently being remapped and are set to change in May 2015  Could get delayed……
  • 25. In Closing  Get an Elevation Certificate  Go to MappusInsurance.com for coupon  Work with a competent insurance agent  Create a great customer experience
  • 26. How To Contact Andrew Andrew Muller, CIC, AAI, PRIS 843.714.9389 Cell 843.763.4200 Office Andrew@MappusInsurance.com www.MappusInsurance.com Want to stay current on flood insurance and other home insurance tips and strategies for your clients to help reduce their risks and premium? Email Andrew with the subject line “CTAR Flood Presentation” and you will be entered to win a $50 Gift Card to Maverick Restaurant Group
  • 27. What the Association of REALTORS® is doing: WORKING WITH U.S. HOUSE OF REPRESENTATIVES: With NAR’s support, Reps. Bill Cassidy (R-LA) and Maxine Waters (D-CA) have successfully passed out of the House an amendment to the Homeland Security Appropriations Bill to delay removal of “grandfathered” flood insurance rates for one year. This will provide FEMA with additional time to complete the “Biggert-Waters” affordability study and report to Congress on the impact of this and other rate reforms. Congressman Mark Sanford voted for the amendment. SENATE HAS YET TO ACT; DELAY IS NOT LAW WORKING WITH U.S. SENATE: United States Senators Mary Landrieu (D-LA) and David Vitter (R-LA) are working with NAR to include the delay in the Senate version of the Homeland Security Appropriations Bill, and also expand it to include the other rate provisions effective October 1st which will start impacting home purchases later this year. Senate has not yet voted on amendment. AMENDMENT FOR DELAY ONLY FOR GRANDFATHERING The law’s other phase-outs -- for older second homes and business properties and for homes purchased after July 2012 – will continue to take effect on October 1, 2013. NAR is working on a longer delay and expanding it to include the other subsidy phase-outs, in addition to grandfathered properties.
  • 28. MORE ON WHAT REALTOR® ASSOCIATION IS DOING FOR YOU: FEMA is developing an affordability study in a report to Congress. NAR is working with FEMA to provide the data we receive from our survey. NAR successfully advocated for the study’s inclusion in the five year bill. CITIES can lower their flood insurance premiums for their entire jurisdiction by sometimes just as simple as filling out paperwork through the Community Rating System (CRS). CTAR will be working with cities over the next year to ensure they’re doing all they can to improve their community rating. CONGRESSIONAL STAFF SYMPOSIUM: NAR, in cooperation with the American Bankers Association and the National Association of Home Builders, held a flood insurance forum for Members of Congress and congressional staff. The purpose of the forum is to educate Congress on the coming changes required under the Biggert-Waters legislation and discuss legislative and regulatory options currently under discussion. COMPLETED U.S. SENATE BANKING COMMITTEE: Conducted a hearing on the affordability of the NFIP rate provisions. COMPLETED