The National Flood Insurance Program has released rate changes for new & renewal policies beginning April 1st, 2017. We’ve put together some bullet points that will help you easily decipher the expected premium changes and what this means for your flood policy. If you are purchasing a home, and have (or will have) a flood insurance policy, here’s what you can expect.
Flood Premium Increases Overview
Flood insurance rates will increase from an average of approximately $830 per policy to $880 per policy in 2017. This represents an average increase of 6.2% for the entire program.
The largest increases of 25% will apply to homeowners that are located in flood zone AE, are Pre-Firm (homes built before 1975) and meet the following criteria:
- Non-Primary Residences (Secondary Homes & Rental Properties)
- Substantially Damaged Properties- 50% or more of value claimed in a prior loss
- Severe Repetitive Loss Properties (SRL)- 4 or more minor flood claims (over $5,000) at one location in 10 years or 2 major flood claims (exceeding value of property) for lifetime.
- Business properties
If your home was built before 1975, has not been substantially improved and fits into one of the four categories above, you can expect rate increases of 25% per year until full rates are reached.
Pre-FIRM (Built before 1975) Primary Residence Flood Zone AE Increases
Generally speaking, If your home was built prior to 1975 and does NOT meet the above 4 criteria, and you’re located in flood zone AE, your premium increases will be limited to 18% but must increase by at least 5% annually.
Flood Zone X
If your property is located in Flood Zone X & you have a Preferred Risk Policy (PRP), like the majority of Long Island New York homeowners that own a house NOT located on the water, you can expect premiums to remain unchanged in 2017.
- Standard-Rated Policies- Premiums will increase 2%, with a total increase of 1%
- Preferred Risk Policies (PRP’s)- Premiums will remain unchanged
The majority of New York homeowners will experience a premium jump, on average, of approximately 6%, unless your home has been substantially damaged or has experienced multiple losses.
This guide gives a general overview and does not include probation surcharges, FPF, and Congressionally-mandated HFIAA surcharges that are not considered premium and, therefore, are not subject to the premium cap limitations. In some cases, homeowners may experience premium rate increases in excess of the cap limitations of 18%.
Do you own a home that doesn’t fit any criteria listed in this article? Have a flood insurance question? Give us a call (631-782-3175) to speak with one of our New York State licensed flood insurance specialists or fill out our Flood Insurance Form to get competitive rates today.