FEMA Girds for Reaction to “Actuarially Sound” NFIP Rates

Federal Emergency Management Agency officials are girding for sticker-shock outrage from consumers as they prepare to implement recent Congressional reforms for across-the-board rate increases in the flood insurance program...
December 12, 2012

Federal Emergency Management Agency officials are girding for sticker-shock outrage from consumers as they prepare to implement recent Congressional reforms for across-the-board rate increases in the flood insurance program.

In addition to already-scheduled baseline increases for October 2012 and January 1, 2013, the NFIP reform laws H.R. 5740 and the Biggert-Waters Flood Insurance Reform Act of 2012, enacted by Congress in July, impose additional increases beginning in January with more to come moving forward. The increases come in three forms: (a) elimination of subsidies on all Pre-Firms that no longer qualify as primary residences (a 25% increase over four years which is already starting to be implemented); (b) all other properties are to face phased-in actuarial rates of 20% over five years; and (c) further modifications to and/or completion of remapping of all coastal and flood zones, which many times impose higher hazard zones and increased elevation requirements. The Biggert-Waters changes begin their phase-in effective January 1, 2013.

What It Means to Agents: Agents selling flood insurance will need to stay up on the changes in the NFIP that are going into effect as a result of the Biggert-Waters Act. These changes are being “rolled in” between now and Jan. 1, 2014. Keeping up with all the changes will be complicated, until everything is in place.

FEMA Reps Bracing for Consumer Backlash (National Underwriter 12/3/12)

FEMA w-12109 - Summary of Implementing reforms


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