What you should know about the 2012 Flood Insurance Reform Act

In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012, which required the National Flood Insurance Program (NIFP) to raise rates to reflect true flood risk and make the program more financially stable.

As a result, many homeowners (but not all) may see immediate increases in current flood insurance premiums. Here is a quick FAQ to help you understand what to expect.

Which properties will it affect?

Subsidized rates for non-primary and secondary residences are being phased out now.

-  Owners of non-primary/secondary residences in a Special Flood Hazard Area (SFHA) will see 25% increase annually until rates reflect true risk

-  Owners of property, which has experienced severe or repeated flooding, will see 25% rate increase annually until rates reflect true risk

-  Owners of business properties in a Special Flood Hazard Area will see 25% rate increase annually until rates reflect true risk

 Owners of primary residences in SFHAs will be able to keep their subsidized rates unless or until:

-  You sell your property;

-  You allow your policy to lapse;

-  You suffer severe, repeated flood losses; or

-  You purchase a new policy

Talk to your insurance agent about how your policy will be affected, and actions you may be able to take (or avoid) to lessen the impacts.

For more information on the Biggert-Waters Flood Insurance Reform Act of 2012, and a timetable for when changes will be effective, visit the FEMA website.

 



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