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Biggert-Waters Flood Insurance Reform Act of 2012 (BW12) – Oct 2013 Changes

Biggert-Waters Flood Insurance Reform Act of 2012 (BW12) – Oct 2013 Changes. This is an audio-enhanced PowerPoint presentation. To hear the audio, please open this presentation in “Slide Show” view. Biggert-Waters Flood Insurance Reform Act of 2012 (BW12).

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Biggert-Waters Flood Insurance Reform Act of 2012 (BW12) – Oct 2013 Changes

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  1. Biggert-Waters Flood Insurance Reform Act of 2012 (BW12) – Oct 2013 Changes This is an audio-enhanced PowerPoint presentation. To hear the audio, please open this presentation in “Slide Show” view.

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

  3. BW-12 Timeline

  4. BW-12: What’s Changing • Subsidies being phased out • Non-primary residences (January 1, 2013) • Business properties • Severe repetitive loss properties (1-4 family residences), and properties where claims payments exceed fair market value • New policies to be issued at full-risk rates • After the sale/purchase of a property • After a lapse in insurance coverage • After substantial damage/improvement • For properties uninsured as of BW-12 enactment • As new or revised Flood Insurance Rate Maps are issued (grandfathered policies planned to be phased out over 5 years)

  5. Changes to Other Subsidized Rates Changes as of October 1, 2013 • 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 family residences increase 25% a year until they reach full-risk ratesIncludes buildings with cumulative flood insurance payments that meet or exceed fair market value

  6. Changes as of October 1, 2013 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 enacted Direct Move to Full-Risk Rates

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

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

  9. 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

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

  11. 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

  12. 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

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

  14. 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

  15. 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

  16. 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 • Substantial improvement or damage

  17. 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

  18. 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

  19. 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

  20. Tools and Resources

  21. 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 FEMA Flood Map Changes Course http://www.h2opartnersusa.com/nfiptraining/mapping_changes.html YouTube BW12 Video http://www.youtube.com/watch?v=tpeqSQr3ngY+

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

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

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