The document outlines changes to the National Flood Insurance Program (NFIP) in Rhode Island, highlighting the requirement for flood insurance in high-risk areas and the upcoming adjustments to insurance rates due to reforms aimed at financial stability. Effective October 1, 2013, certain properties will see annual rate increases until they reflect true flood risk, with significant impacts on subsidized non-primary residences and businesses in Special Flood Hazard Areas. Additionally, new flood maps will phase out grandfathering discounts, and property owners are encouraged to discuss options with insurance agents and consider mitigation strategies.

1. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
National Flood Insurance
Program – What changes are
happening in Rhode Island?
North Kingstown Community Center
September 19, 2013

2. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
National Flood Insurance Program
Background
• National Flood Insurance Act of 1968
– Established the NFIP
– Required mapping of flood-prone areas
– Made flood insurance available to all residents of
communities that meet floodplain management
requirements
– Afforded communities ability to obtain certain
types of disaster assistance

3. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
The NFIP: How It Works

4. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
Flood Insurance Facts
• Standard homeowners insurance doesn't cover flooding.
• Flood Insurance is required if you live in a Special Flood
Hazard Area (SFHA) or high-risk area AND have a federally
backed mortgage or other commitment (reverse mortgage,
line of credit, etc.)
• A lender can require flood insurance, even if a structure is
NOT in the SFHA.
• Flood insurance can be purchased through a local insurance
agent.

5. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
Rhode Island NFIP Facts
• All 39 communities and 1 Tribe participate in the National
Flood Insurance Program (NFIP).
• Currently 16,123 policies in Rhode Island
(Data as of Sept. 16, 2013)
– Bristol: 2,141
– Kent : 2,439
– Newport: 3,016
– Providence: 2,668
– Washington: 5,859
• Average RI Premium is $1,343/annually
North Kingstown
• Entered the NFIP
on 7/14/1972
• Currently 911
policies in force
• 18 V Zone
• 528 A Zone
• 365 X Zone

6. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
Important Terms
• Base Flood: Flood that has a 1% chance of being equaled or
exceeded in any given year.
• Flood Insurance Rate Map (FIRM): An official map where FEMA has
delineated the special flood hazard area.
• Pre-FIRM structure: A structure built before the community’s first
FIRM became effective. (Before 7/14/1972 for North Kingstown)
• Post-FIRM structure: A structure built after the community’s first
FIRM became effective. (After 7/14/1972 for North Kingstown)
• Special Flood Hazard Area (SFHA): Areas subject to the Base Flood
or greater in any given year. These include V Zones and A Zones.

7. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
Mapping: Why New Maps?
• There is a nationwide project underway to update the FEMA
FIRMs. A combination of new data and outdated maps has
propelled the project.
• The maps were created by FEMA contactor, STARR, through
extensive modeling using new transects, surveys and coastal
analyses.

8. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
Projected Effective Dates
• Bristol County: May 16, 2014
• Kent County: September 18, 2013
• Newport County: September 4, 2013
• Providence County: September 18, 2013
• Washington County: October 16, 2013
• The preliminary maps will go effective county-wide on these
dates.
• If communities want to remain in good standing with the NFIP
(and they do), each impacted community will adopt the
floodplain ordinance and corresponding panels.

9. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
• Congress passed the Flood Insurance Reform Act of 2012
(Biggert-Waters 2012), which will:
– Make the NFIP more financially stable by raising rates on certain
classes of property to reflect true flood risk; and
– Trigger rate changes for certain properties within a revised or
updated map area to accurately reflect the flood risk.
• Intent is to eliminate subsidies for:
– Structures built prior to the first flood insurance map in a
community (pre-FIRM)
– Policies based on the map in effect when structure was built
(grandfathering)
• Artificially low rates and discounts no longer are sustainable.
Changes are Coming to the NFIP

10. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
• Revised Premium Rates
– V Zones (Coastal velocity zones)
• Post-FIRM: Premium will increase 11%
• Pre-FIRM: Premiums will increase 17%
– A Zones
• Post-FIRM: Premium will increase 6%
• Pre-FIRM: Premiums will increase 16%
– X Zones (outside the SFHA)
• Standard-Rated Policy: Premium will increase 8%
• Preferred Risk Polices (PRP): Premiums will increase 1%
• Revised Premium Rates
• Reserve Fund – 5% reserve fund assessment is to be included for all
policies other than PRP’s.
• Federal Policy Fee – Increasing from $20$22 for PRP policies and from
$40$44 for all other policies
Program Changes Effective Oct. 1, 2013

11. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
• Not everyone – 43% of NFIP policies in RI receive subsidies.
• Owners of subsidized non-primary residences in a Special Flood
Hazard Area will see 25% increase annually until rates reflect true
risk – began January 1, 2013.
• Owners of subsidized property that has experienced severe
repetitive flood losses or that has incurred flood cumulative
damage with flood insurance payments exceeding the value of the
structure will see 25% rate increase annually until rates reflect true
risk – October 2013.
• Owners of subsidized business properties in a Special Flood
Hazard Area will see 25% rate increase annually until rates reflect
true risk – October 2013.
• Owners of substantially damaged or substantially improved
subsidized property will see 25% rate increase.
Who Will Be Affected by Subsidy Changes?

12. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
Current & Upcoming Insurance Rate Changes
Effective Date Type of Structure Changes
Jan 1, 2013 Non-Primary Pre-FIRM Residence Up to 25% increase per
year till full risk
premium is reached
Oct 1, 2013 Pre-FIRM Business Properties
Pre-FIRM Severe Repetitive Loss
Properties
Up to 25% increase per
year till full risk
premium is reached
All new Pre-FIRM policies effective on
or after July 6, 2012.
Including those due to property being
sold, a policy lapse, severe repetitive
flood losses, and new policy purchased
for any reason.
First renewal or
purchase after Oct 1,
2013 will be based on
full risk premium
Oct 1, 2014 When a new map changes the flood
zone or flood elevation for any
property
5-year phase till full risk
rating is reached based
on new map

13. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
Direct Move to Full-Risk Rates
 After the purchase of a property
 Subsidized rates cannot be assigned to the new
owner
 After a policy lapse
 When a new policy is issued
 Policies for buildings uninsured as of the date that the
law was passed (July 6, 2012)
 If an offer to mitigate has been refused
 These changes will start October 1, 2013

14. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY

15. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
What about when a new flood map is adopted?
• If you live in a community which adopts a new,
updated Flood Insurance Rate Map (FIRM) :
– Charging of insurance premiums based on a prior
FIRM -- grandfathering -- will be phased out.
• The Biggert-Waters Act Section 100207 calls for a phase-
out of grandfathering discounts for properties shown on
Flood Insurance Rate Maps that are updated.
• But the pain is lessened somewhat, because new rates
will be gradually phased in at 20% per year for five years
• Implementation anticipated in 2014

16. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
 Owners of primary residences in SFHAs will be able to
keep their subsidized rates unless or until:
 You sell your property (new rates will be charged to
next owner if they insure;)
 You allow your policy to lapse
 You suffer severe, repeated flood losses; or,
 You purchase a new policy (after July 6, 2012).
Who Won’t Be Affected by Subsidy Changes?

17. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
 Home and business owners:
 Talk to your insurance agent about your insurance options
 You’ll probably need an Elevation Certificate to determine your correct rate
 Higher deductibles might lower your premium
 Consider remodeling or rebuilding
 Building or rebuilding higher will lower your risk and could reduce your
premium
 Consider adding vents to your foundation or using breakaway walls
 Talk with local officials about community-wide mitigation steps
 Community leaders:
 Consider joining the Community Rating System (CRS) or increasing
your CRS activities to lower premiums for residents.
 Talk to your state about grants. FEMA issues grants to states which
can distribute the funds to communities to help with mitigation and
rebuilding.
What Can Be Done to Lower Costs?

18. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
• Many changes are coming to the Flood Insurance program
• Congress acted to make program stronger financially.
• On many more policies, flood insurance rates will reflect full
risk.
• Insurance rates will rise on some policies; and
• There are specific actions which will trigger rate changes.
• Talk to your insurance agent about how changes may affect your
property and flood insurance policy.
• Building or rebuilding higher can lower your flood risk and
could save you money.
• FEMA can help communities lower flood risk and flood
insurance premiums through:
• Community Rating System program;
• Various mitigation grants; and
• Technical advice on building and rebuilding to mitigate future flood
damage.
What You Need to Remember

19. RHODE ISLAND EMERGENCY MANAGEMENT AGENCY
Michelle Burnett
Rhode Island State Floodplain Manager
Rhode Island Emergency Management Agency
645 New London Avenue Cranston, RI 02920
Direct: (401) 462-7048
Michelle.F.Burnett.nfg@mail.mil
Contact Information