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Biggert Waters and HFIAA changing the flood program

Biggert Waters and HFIAA changing the flood program. “Not your parents flood program “. Websites for Flood Info. www.floodsmart.gov – information for the National Flood Program. www.txchart.com – digital flood maps for the 17 coastal counties

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Biggert Waters and HFIAA changing the flood program

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  1. Biggert Waters and HFIAAchanging the flood program “Not your parents flood program “

  2. Websites for Flood Info • www.floodsmart.gov – information for the National Flood Program. • www.txchart.com – digital flood maps for the 17 coastal counties • www.riskmap6.com – flood map information for every county in the state of Texas and other states in the NFIP Region 6

  3. Background on NFIP • Started in the 1968 • Given to the WYO’s around 1983 (Mutual of Omaha) • Doing fine until Hurricane Katrina (2005) and Sandy (2012) now almost $30Billion in the red

  4. Why BW-12 • Must do something to stabilize the Federal Flood program. • Reforms based on removing subsidizes in the program. • The two largest were the Pre-firm policies and “grandfathering” of polices to old rate maps in effect when house was built.

  5. BW-12 • Section 205 removes subsidized rates • Does away with the “pre-firm” rate zz (Oct 1, 2013) • Rates given to houses built before Dec 1974 or date that the community came into the flood program. • Rating was done without an elevation certificate with no under writing guidelines

  6. BW-12 • 3 step process • New policies written after Oct 1, 2013 in an “A “zone or “V “ zone will have to have an elevation certificate no matter the date of construction. • Retroactive back to July 6,2012 policies that originated after this date were being non-renewed and you will have to get an elevation certificate to continue coverage. • Those who have a policy that originated before July 6, 2012 can keep them.

  7. BW-12 • Those who can keep their “prefirm “ policy • If that policy is on a secondary home or commercial structure they will take a 25% rate increase every yearuntil theyreach actuary rates on the structure. • If it is your primary home your rate increase last Oct was 16% in an “A” zone and 17% in a “V” zone. • If you sell your property the new buyer must get an elevation certificate to be rated.

  8. BW-12 • Section 207 does away with “grandfathering” • Basically says that if a new map comes to your area all policies must take the effects of the new map. • Additional premiums will be phased in over a 5 year period at 20% per year. • Added a 5% surcharge in A and V zone for catastrophe fund.

  9. Reaction from the Public • Panic • Chaos • “What about my home value” • “Flood will become to expensive” • “This will destroy the economy of our community”

  10. News Media Headlines • Flood premiums going up over $25,000 • Flood insurance to become unaffordable for most families • Communities struggle to afford flood insurance with new regulations.

  11. HFIAA becomes law May 2014 • Homeowner Flood Insurance Affordability Act effective June 1, 2014 • Revives the Pre-firm policy back to rates that were in effect before Oct 1, 2013. • Those who were affected by the change would be given their old policy rate back and given a refund. • Adds a surcharge to each flood policy to pay for the subsidy.

  12. HFIAA 2014 • Removed the section 207 from the Biggert-Waters Act of 2012. • This allows “grandfathering” to stay as is within the flood program for the foreseeable future. • Maintains the 25% premium increase for non-primary residential and commercial structures if written as pre-firm.

  13. HFIAA 2014 • Establishes a rate increase structure • Flood premiums must increase by 5% a year but not to exceed 18% a year. (under BW-12 there was only a 20% maximum cap)

  14. June 1, 2014 changes • Other residential more than 5 units (apartment buildings and nursing homes). Maximum building coverage was raised from $250,000 to $500,000 per building. • Deductibles are being raised from $1,000 to $1,250 standard policy and pre-firm policy from $1,500 to $2,000. • Based upon level of building coverage over $100,000.

  15. June 1, 2014 Changes • All pre-firm policies will be moved to secondary status and if it is your primary residence you will have to show documentation to prove.

  16. Map Changes • Bexar County map changed in 2010. • New High Hazard zones were drawn. • (A zones that are the 100 year flood plain.) • Mortgage Protection Act will cause homeowners who have a mortgage in these areas to buy flood coverage.

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