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Will the Biggert-Waters Reform Act cause flood insurance rates to increase?

Flood Agent_RSMore than 80 percent of policyholders (representing approximately 4.48 million of the 5.6 million policies in force) do not pay subsidized rates.

About 20 percent of all NFIP policies pay subsidized rates. Only a portion of those policies that are currently paying subsidized premiums will see larger premium increases of 25% annually starting this year, until their premiums are full-risk premiums. Five percent of policyholders – those with subsidized policies for non-primary residences, businesses, and severe repetitive loss properties - will see the 25% annual increases immediately. . Subsidies will no longer be offered for policies covering newly purchased properties, lapsed policies, or new policies covering properties for the first time.

The 80% of all NFIP policies that already pay full-risk premiums will not see these large premium increases. Most policyholders will see a new charge on their premiums to cover the Reserve Fund assessment that is mandated by BW-12. Initially, there will be a 5% assessment to all policies except Preferred Risk Policies (PRPs). The Reserve Fund will increase over time and will also be assessed on PRPs at some undetermined future date.

Additional changes to premium rates will occur upon remapping, the provision calling for these premium rate changes will not be implemented until the latter half of 2014.   Click if you want to read more about the Biggert-Waters Reform Act of 2012.  If your home or business has been flooded Build Back Safer and Stronger.  Click here if you are rebuilding in an AE Zone.  Click here if you are rebuilding in a VE Zone.  Click here if you need more information about the different Flood Hazard Zones.

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