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Prepared by National Flood Services
Flood Insurance It’s more than just a lender requirement – don’t get left behind…
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Prepared by National Flood Services Proprietary & Confidential
History of the NFIP
Congress established the NFIP with the passage of the National Flood Insurance Act of 1968
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Prepared by National Flood Services Proprietary & Confidential
History of the NFIP
The Federal Emergency Management Agency (FEMA) administers the NFIP
Participation in the NFIP is based on an agreement between local participating communities and the federal government
Community agrees to implement and enforce floodplain measures (ordinances and laws) to reduce future flood damage to new construction in Special Flood Hazard Areas
Everybody lives in a flood zone
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History of the NFIP
The Standard Flood Insurance Policy is available through WYO companies and through the NFIP Direct
Write Your Own (WYO) Program began in July 1983
The rates and regulations are set by the federal government and approved by Congress
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History of the NFIP
National Flood Insurance Act of 1968
Flood Disaster Protection Act of 1973
Coastal Barrier Improvement Act of 1990 and Coastal Barrier Resources Act
National Flood Insurance Reform Act of 1994
Flood Insurance Reform Act of 2004 was enacted June 30, 2004
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History of the NFIP
Biggert-Waters NFIP Reform Act was signed into law on July 6, 2012
-Implementation began on January 1, 2013
-Extends the Program for 5 years while requiring significant program reform
Homeowner Flood Insurance Affordability Act was signed into law on March 21, 2014
-Implementation began on October 1, 2014
-Focus on implementing recent law by adjusting premium increases, issuing new rates and map updates, supporting mitigation and ensuring advocacy to connect policyholders with the information they need to better understand the program
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Changes, changes, and more changes
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Changes
April 2015 Changes
- Rate Changes
- Reserve Fund Assessments 15%/PRP 10%
- Annual Surcharge $25 primary residence/$250 all other
- Substantially Damaged/Improved Structures 25% increase
- Property Newly Mapped into SFHA
- Federal Policy Fee changes
- Minimum Deductibles and Increased Option Deductibles
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Changes
Full-risk rates in our future
Subsidized rates are offered for Pre FIRM buildings (built before 12/31/1974 or before the effective date of the initial FIRM whichever is later)
Pre-FIRM buildings can be rated using full-risk rates if more favorable to the property owner
Subsidized premium rates will be phased out over time through annual premium increases
Once it is determined that full-risk rating will provide a lower premium, a policy may be endorsed for the current policy year only to obtain a lower rate.
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Where it rains…it can flood
Covered losses are paid through the National Flood Insurance Fund
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Rating Basics
Ratemaking: subsidized and actuarial also known as Full-risk rates
Subsidized rates – based on general rating factors (Pre FIRM properties)
Full-risk rates – based on property specific information – there is a rate for most risks
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Community Approval vs Rating
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Community Approval vs Rating
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Community Approval vs Rating
Submit-for-Rate - Rates used for Post FIRM non-compliant structures
Documentation required includes a Community issued a variance
If no variance was granted, a signed statement from the agent or applicant that no variance was granted is acceptable
Variance or no variance does not impact rate
FEMA Mitigation utilizes this information to determine if communities are complying with the NFIP Floodplain Management Ordinance for Post FIRM structures
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Variance Chart
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Variance Chart
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Resources
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FEMA Homeowner Flood Insurance Affordability Act
http://www.fema.gov/media-library-data/1396551935597-4048b68f6d695a6eb6e6e7118d3ce464/HFIAA_Overview_FINAL_03282014.pdf
FEMA Flood Insurance Reform – The Law Informational links to the laws passed:
https://www.fema.gov/flood-insurance-reform-law
FEMA Flood Insurance Reform – Resources for Property Owners and Renters, Insurance Agents, Real Estate Agents and Community Officials:
https://www.fema.gov/flood-insurance-reform-resources-property-owners-and-renters-insurance-agents-real-estate-agents-and
FloodSmart.gov
https://www.floodsmart.gov/floodsmart/pages/flooding_flood_risks/ffr_overview.jsp
Prepared by National Flood Services Proprietary & Confidential
Contact List
Amy Itschner
Compliance Manager
1.888.888.2169 x2704
Connie Floria
Team Lead Training Specialist
1-888-888-2169 x1210
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