2. What is Biggert-Waters??
On July 6, 2012, the Congress of the US signed the
Biggert-Waters Flood Insurance Reform Act of 2012
• Reauthorized the National Flood Insurance Program
(NFIP) for 5 years
• Discontinue certain premium subsidies
• Mandated that NFIP charge risk-based or
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actuarial rates to each property covered.
• Create a Reserve Fund (5% to all)
• Study future flood insurance issues
3. Flood Policy Terms to know:
Subsidized = Not rated using risk based (actuarial) rating.
Pre-FIRM = Built prior to a communities initial Flood Insurance Rate Map.
High Risk Flood Zones = Flood zones starting with an A or V or D
Low to Moderate Risk Flood Zones = Flood Zones B, C, or X
Risk-based Rating = Matching both the premium charged for flood
insurance
to the established risk of flooding.
EC (Elevation Certificate) = Licensed surveyor form describing elevations,
characteristics of a building and flood zone risk for flood
policy
riskbased rating.
Lapsed policy = where premium payment is received beyond the 30-day grace
period following the policy’s expiration date.
Tentative rates = rates developed to allow policies to be issued until risk based
rates can be applied. Good for one policy term only.
4. Exercise
• Raise your hand if you live in a SFHA. (V, A, D zone)
• If your home was built after 1974 put your hand down
• If the elevation of your home is equal to or above the BFE
and you have a EC with your agent put your hand down.
5. Section 205 Deals with Pre-Firm
Properties and Commercial Properties
• Residential property that is not a primary residence
• Severe repetitive loss properties
• Property with cumulative losses exceeding FMV
• Any commercial property
• New policies, lapsed policies, policies for newly purchased properties
• Any policy where the owner has refused a FEMA mitigation offer
• Properties built prior to 1974 or community’s adoption of FIRM
• Properties that sustain damage exceeding 30% of FMV after July ‘12
The policies will increase 25% per year until
reaching actuarial rates
6. Section 207 Deals with Post FIRM
Properties after Remapping
• Coastal Mississippi was remapped in 2007
• Hancock County requested remapping and it is taking
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•
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place now.
Post FIRM primary residences rates will increase 20% per
year until reaching actuarial rates based on new maps
2 bills working through congress to delay for 1 year
Funds were allocated to accelerate remapping over the
next 5 years
Input into the remapping process is crucial
7. It’s Not All BAD!!!
• Increases mitigation funds
• Increases mitigation options including
Demo and Rebuild!!
• If you are above BFE your rate might just
decrease!!
8. Premium comparisons- Non actuarial vs. actuarial
Building- $250,000 Contents- $100,000
(Oct. 1, 2013 rates, slab on grade, one story, single family)
$2,563/yr
$2,563/yr
$2,563/yr
Non-Actuarial
$1,835/yr
$6,442/yr
$15,183/yr
Actuarial
The above is calculated with no CRS discount
9. Sample Policy
• Residence Insured for $200,000 Building
• 1 Foot below BFE
AE Flood Zone
• Building – First $60,000 @ $4.40 Per $100 = $2,640
• Remaining $140,000 @ .97 Per $100 = $1358
• Total Cost - $3998.00
• Same House 1 Foot Above BFE - $566.00
• Same House 2 Foot Above BFE - $364.00
10. How Can We Affect Remapping?
• Rebuild the barrier islands.
• Scrutinize model input data.
• Accuracy of Topography
• Accuracy of manmade structures impacting surge and waves
• Accuracy of modeled storms
• Relevancy of modeled storms
• Build dikes or levees. (feasible for areas subject to river
flooding but less likely for coastal properties)
Congress has authorized $400,000,000 per year for
2013 through 2017 for flood mapping!!!
11. Revised Mitigation Programs
• Consolidates and streamlines programs.
• Funds at $90MM per year versus $50MM previously.
• Allows Flood Mitigation Plan to be part of community’s
multi-hazard mitigation plan.
• Removes beach nourishment as an allowed mitigation
activity.
• Adds demo and rebuild as allowed.
• Up to 100% for severe repetitive loss structures, 90% for
repetitive loss and 75% for all other activities.
13. What should we be doing?
• Determine how the changes are going to affect your home
or business.
• Prepare to scrutinize remapping effort. (global warming)
• Developing maps with overlays of information from
various data bases to determine:
• Economic impact to state from premium increase dollars leaving
the state.
• Quantify affected properties.
• Quantify needed mitigation or buy out funds to determine adequacy
of federal allocation.
Homes located in a high-risk flood zone that were built before the first flood insurance rate map became effective, and that have not been substantially damaged or improved, may currently be receiving subsidized rates, These subsidized rates for “pre-FIRM” homes will be phased out.
