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Biggert-Waters Flood Insurance Reform Act of 2012 (BW12)

Biggert-Waters Flood Insurance Reform Act of 2012 (BW12). Understanding the October 1, 2013 Changes. BW-12 Implementation Timeline. BW-12: What ’ s Changing?. Certain subsidized policies will be phased out at a rate of 25% per year until they reach the full risk rate:

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Biggert-Waters Flood Insurance Reform Act of 2012 (BW12)

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  1. Biggert-Waters Flood Insurance Reform Act of 2012 (BW12) Understanding the October 1, 2013 Changes

  2. BW-12 Implementation Timeline

  3. BW-12: What’s Changing? • Certain subsidized policies will be phased out at a rate of 25% per year until they reach the full risk rate: • Non-primary residences (January 1, 2013); • Business properties ; and • Severe repetitive loss properties (1-4 family residences), and properties where claims payments exceed fair market value • Primary residences in Special Flood Hazard Areas will be able to keep their subsidized rates unless or until: • The property is sold / purchased; • There is a lapse in insurance coverage; or • They suffer severe, repeated flood losses. • The full risk rate will be immediately applied to properties with a sale or lapse in coverage on or after July 6, 2012.

  4. Percent of subsidized Policies per state (as of December 31, 2012) http://www.fema.gov/bw12

  5. Interactive Map http://www.fema.gov/bw12

  6. When Maps Change • Phase in will apply for all new Flood Insurance Rate Maps (FIRMs) that are adopted by communities on or after July 6, 2012 • Expected to be implemented late 2014 • Premiums will transition from the current premium to the new premium over 5 years in 20% increments.

  7. Notice to Policyholders • W-13016 (March 29, 2013) • October 1,2013, Program Changes • W-13033 (June 14, 2013) • Procedures for Processing Renewals of Certain Pre-FIRM Subsidized Policies that are New, Lapsed, or Assigned • W-13041 (July 10, 2013) • Additional Guidance on the Procedures for Processing Renewals of Certain Pre-FIRM Subsidized Policies that are New, Lapsed, or Assigned • W-13046 (August 8, 2013) • Final Letter Related to Processing Renewals of Certain Pre-FIRM Subsidized Policies that are New, Lapsed, or Assigned

  8. W-13041 http://www.nfipiservice.com/Stakeholder/pdf/bulletin/w-13041.pdf

  9. WYO Bulletin W-13041 Documentation needed : • Elevation Certificate • Clear exterior photographs of the front and back of the building • Application completed and signed by the agent • Annual premium determined with full-risk premium rates or tentative premium rates

  10. WYO Bulletin W-13046 • Final Letter Related to Processing Renewals of Certain Pre-FIRM Subsidized Policies that are New, Lapsed, or Assigned: • New policies written with an effective date on or after July 6, 2012 • Policies written as new business, or existing policies assigned to a new owner as a result of a property purchase on or after July 6, 2012 • Policies that have lapsed and been reinstated on or after October 4, 2012

  11. W-13046 http://www.nfipiservice.com/Stakeholder/pdf/bulletin/w-13046.pdf

  12. Example #1: Buying/Selling a House in a Special Flood Hazard Area • Flood insurance required • Full-risk rates apply, not pre-FIRM subsidized rates • Plan ahead: consider risk as you plan and budget • Obtain an Elevation Certificate (EC) as soon as possible to learn your full-risk rate – you could save money • Consider mitigating, including elevating the home, before listing it for sale For Sale SOLD

  13. Example #2: Building/Rebuilding a Home in a Special Flood Hazard Area • Be aware of building in a high-risk flood zone • Risk changes over time, so consider current and future flood risks • Build higher/stronger than current standards to lower risk and flood insurance premiums • Talk to local floodplain manager to learn about new maps or data that may be available • Building higher may increase home value

  14. Example #3: Policy Renewal (Subsidized) Primary Home • Policy purchased Prior to July 6, 2012 • Retain subsidized rate as long as home is a primary residence and continuous coverage is maintained • Rates subject to routine actuarial adjustment plus increase for Reserve Fund • Effective after October 2013, full-risk rates would apply if : • New purchase • Policy lapses • Severe Repetitive Loss

  15. Example #4: Policy Renewal (Subsidized) SRL Home, Non-Primary or Business Property • Previous premium did not reflect the home’s full flood risk • Premium will increase 25 percent a year until it reaches the full-risk rate • Rates subject to routine actuarial adjustment plus increase for Reserve Fund • Obtain an Elevation Certificate (EC) as soon as possible to learn your full-risk rate – you could save money

  16. Saving Money on Flood Insurance • FEMA has programs to help owners reduce their risk and save money on flood insurance • Community-wide discounts through the Community Rating System (CRS) • FEMA grant programs support rebuilding and relocating • Use of higher deductibles to lower premium costs But the smartest way to save may be to build higher

  17. Please edit to ensure brand compliance Address Your Risk Elevation Certificate LEARN YOUR RISK Get an Elevation Certificate for your home (risk can change) GET INSURED REDUCE YOUR RISK Resilient Be proactive: don’t risk the Dconsequences of a flood Building or Rebuilding? Build Higher Than current standards STAY INSURED Letting your flood insurance policy lapse could be costly

  18. Tools and Resources

  19. Insurance Agent Training & Info Sign up for WYO Alerts – http://www.nfipiservice.com/mailing_list.html Toll Free numbers : http://www.nfipiservice.com/storm_sandy.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 YouTube BW12 Video http://www.youtube.com/watch?v=tpeqSQr3ngY+

  20. Resources • 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/bw12 • NFIP iService Bureau - http://www.nfipiservice.com • Region 6 Mitigation - http://www.fema.gov/region-vi-mitigation-division

  21. Resources • Audio PPT in English – Understanding the Impacts of the NFIP - http://www.riskmap6.com/documents/resource/Changes%20to%20the%20NFIP-%20Understanding%20BW12_Stakeholder_AudioPPT.ppt • Audio PPT in English – Understanding the October 1, 2013 Changes – http://www.riskmap6.com/documents/resource/BW12%20Oct2013%20Changes%209232013_Audio.pptx

  22. FEMA Region 6 – Jack.Graham@fema.dhs.gov Lisa.Jennings@fema.dhs.gov

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