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Changes to the National Flood Insurance Program (NFIP). Understanding the Biggert-Waters Flood Insurance Reform Act of 2012 (BW12). BW-12: What ’ s Changing. Subsidies to be phased out Non-primary residences Business properties
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Understanding the Biggert-Waters Flood Insurance Reform Act of 2012 (BW12)
Subsidized premium rates for “pre-FIRM” properties in high-risk (A or V) zones will be phased out
Rates will increase 25 percent per year until they reflect the full-risk rate.
Pre-FIRM: Built before the community’s firstFlood Insurance Rate Map became effective and not been substantially damaged or improved
Non-primary residence: A building that will be lived in for less than 80 percent of the yearChanges for Non-Primary Residences
Rates on pre-FIRM commercial buildings Increase by 25% a year until they reach full-risk rates.
Rates for repetitively flooded buildings
(known as Severe Repetitive Loss properties) of one to four residences increase 25% a year until they reach full-risk ratesIncludes buildings with cumulative flood insurance payments that meet or exceed fair market valueChanges to Other Subsidized Rates
After the sale/purchase of a property Subsidized rates can no longer be assigned to the new owner.
After a policy lapse Policyholders should know that allowing a policy to lapse could be costly.
When a new policy is issuedPolicies for buildings uninsured as of the date BW-12 was enactedDirect Move to Full-Risk Rates
Grandfathering will be phased outBW-12 calls for a phase-out of certain discounted premiums, including grandfathered premiums, and a move to full actuarial rates
Section 100207 implementation anticipated in late 2014
Phase-in to full-risk rates anticipated to begin
Note: The Preferred Risk Policy Eligibility Extension will be eliminated when Section 100207 implementation takes placeWhat About Grandfathering?
So how can you help clients save money?
But the smartest way to save may be to build higher
Sign up for Region 6 on-line workshops for BW-12
Select a Webinar date from the drop-down menu:
More Webinars will be set up as BW- 12 moves forward
Webinars in Spanish coming soon
Provide this information to Agents, Lenders and Real Estate Professionals in your area
10:30 – 11:30 am
Sign up for WYO Alerts – http://www.nfipiservice.com/mailing_list.html
Training is available through FEMA for insurance agents, adjusters and lenders www.fema.gov/business/nfip/trainagt.shtm
Sign up for agent training emails - https://public.govdelivery.com/accounts/USDHSFEMA/subscriber/new?topic_id=USDHSFEMA_212
NFIP Training offers workshops and webinars http://www.nfipiservice.com/training/schedule_agents.html
FEMA Flood Map Changes Course http://www.h2opartnersusa.com/nfiptraining/mapping_changes.html
Fact Sheets - http://www.riskmap6.com/Resources.aspx
FloodSmart for Consumers - www.FloodSmart.gov
FloodSmart for Agents – www.Agents.FloodSmart.gov
Flood Insurance Manual - http://www.fema.gov/flood-insurance-manual
Risk Communication Guidebook for Local Officials - http://www.riskmap6.com/guidebook.aspx
Flood Insurance Reform Act Webpage - http://www.fema.gov/national-flood-insurance-program/flood-insurance-reform-act-2012