Flood Insurance Changes Explained

Flood Insurance Changes Explained

The Biggert-Waters act of 2012 is bringing large, somewhat confusing changes to the flood insurance marketplace beginning October 1st, 2013.  I must admit, I had some difficulty deciphering the governmental jargon that the BW-12 will implement.  I put together a “cheat sheet” that will answer the main questions/challenges that we will face here on Long Island.  

  • Flood Insurance Rate Increases bound before 7/6/12
  • Pre-Firm buildings (built prior to Jan 1, 1975) located in flood zone AE will have an average 16% rate increase + a 5% Reserve Fund Assessment, a $44 Federal policy fee and will continue to be a “subsidized” rate.
  • Post-Firm buildings (built after Jan 1, 1975) located in flood zone AE will have an average of a 6% rate increase + a 5% Reserve Fund Assessment and a $44 Federal Policy fee.
  • Flood Zone X (preferred) will receive a 1% increase in cost but no increase in premium. The additional cost stems from the Reserve Fund Fee increasing to $22.
  • Flood Policies Bound between 7/6/12-9/30/13 and are Pre-Firm Buildings


If the building is Pre-Firm (built prior to Jan 1, 1975) the NFIP is requiring the following to maintain coverage:

  • An elevation certificate for flood insurance.
  • A renewal application must be completed and signed by the agent.
  • Clear exterior photographs of the front and back of the building.
  • Annual premium with full-risk premium rates (no longer subsidized).

If above criteria is not met the policy will be set for non-renewal (during the next renewal term) and will be considered a new submission.

New Business effective October 1st 2013 moving forward

  • Will be subject to Full Risk Rates (no longer will be subsidized.)
  • Will need an elevation certificate.
  • If no elevation certificate is provided you will be able to get tentative rates, at a very high premium, until the elevation certificate is provided. Policy will be non-renewed following year if no elevation certificate is provided.
  • Yearly premium paid n full.
  • Color photos may be required
  • If an insured purchases a new home with a low elevation (flood zone AE) we will not be able to determine the premium until an elevation certificate is complete.
  • Halting of governmental subsidization of the Pre-Firm program will mean that some low lying structures will see unbelievably high flood rates, even with a completed elevation certificate.

As always, my staff at Coastal Insurance Solutions strives to stay ahead of the knowledge curve as it pertains to insuring coastal properties. Please feel free to contact myself, or anyone in my staff, with any questions regarding the upcoming changes in law. I have also attached a copy of the talking points from the Biggert-Waters 2012 conference here. It is a very useful resource.



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Learn about the National Flood Insurance Policy Changes made April, 2016

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