Following a pattern similar to last year, this Spring brings a series of rate changes for the NFIP effective April 1.
New NFIP flood insurance rates affect homeowners in several categories. Owners of secondary, non-primary homes may see the most significant rate changes. Premiums for many non-primary homes and business flood policies will see increases of 25%.
How will NFIP flood insurance rates change?
Several property types insured by NFIP policies have received subsidized pricing because construction began before an initial Flood Insurance Rate Map (FIRM) was in place for the community. These properties, known as Pre-FIRM, will see the largest rate change. However, rates for other NFIP policies may change as well, and certain Pre-FIRM property types see the highest increases. New rates affect new NFIP policies or NFIP policies up for renewal.
Under the flood insurance affordability act, premiums for certain properties with subsidized pricing must increase 25% per year until premiums for those properties reach market rates. This scheduled increase can mean sizeable premium changes for some homes.
Which types of policies will be affected?
Expect the most significant premium changes for properties in the following categories:
- Non-primary homes, including vacation homes and second homes with Pre-FIRM subsidized policies;
- Pre-FIRM Business properties;
- Severe Repetitive Loss (SRL) properties;
- Substantially damaged/substantially improved properties;
By law, these Pre-Firm subsidized properties listed above must increase 25% annually until premiums reach market rates.
The following property types will also see increases:
- Policies for subsidized Pre-FIRM primary homes can expect a premium increase of 7.7%;
- Pre-Firm subsidized properties not listed above must increase at least 5% per year until premiums reach market rates following the Homeowner Flood Insurance Affordability Act.
Premium Changes Effective April 1, 2021:
| Pre-FIRM Property type | Premium Increase | Billed Increase |
| Non-primary home | 24.9% | 23.5% |
| Business Policies | 25% | 24.2% |
| Severe Repetitive Loss (SRL) Properties | 24.9% | 24.3% |
| Substantially Improved Properties: | 24.8% | 24.0% |
| 7.7% | 7.3% |
Learn more about your coverage options
In the past, the NFIP offered the only flood insurance solution for homeowners in many areas. NFIP policies also made it difficult for homeowners to switch to a private market flood insurance provider.
However, recent changes to NFIP rules now make it easier to switch flood insurance policies, even partway through your policy term.
Many homeowners can qualify for a refund of unused premiums when switching to another provider. These newer guidelines from the NFIP give you more freedom to choose affordable protection that better suits your coverage needs while also making the switch painless.
As many homeowners in flood-prone areas are aware, NFIP policies also limit coverage for both buildings and personal property, often leaving the homeowner with less coverage than needed in a total loss. Private market policies can expand NFIP coverage to insure your home fully or can replace your NFIP policy entirely.
You can often save on premiums with a private market policy while also increasing coverage and reducing potential out-of-pocket expenses if you have a claim. We work with the finest private market insurers in the nation, and our knowledgeable insurance advisors can customize an affordable solution to protect your home, second home, or your business.
Should I get a flood insurance quote if my home is not
in the rate-increase group?
Upcoming NFIP premium changes for other properties, called Post-FIRM properties, probably won’t break the bank, but there are some compelling reasons to consider different policy providers. Policies offered through private insurers may fit more seamlessly with other coverage for your home.
Standard NFIP policies play an essential role in ensuring that coverage is available to everyone. Flood insurance risks can be challenging to predict, though. The possibility of significant losses combined with unpredictability forced many private insurers to avoid flood insurance altogether.
Technology tools such as artificial intelligence and advanced mapping now make flood insurance a viable market for private market providers. In many cases, you can purchase more coverage for less money.
Many private market policies also give you more control over deductibles so that you can insure your property according to your comfort level and risk tolerance. Higher deductibles can lower premiums further. Lower deductibles reduce your out-of-pocket risk.
Flood coverage savings opportunities aren’t limited to those with Pre-FIRM policies, and private market policies often offer more customization options than NFIP policies.
Reach out today to compare flood insurance rates
With additional NFIP increases slated for January 1, 2022 — and some increases as high as 15%, now is the time to shop rates with private market providers and lock in lower premiums or enhanced policy coverage.
Reach out to the experienced advisors at Coastal Insurance to compare quotes and review the best flood insurance options to protect your home.
FEMA Flood Insurance Changes 2018
Flood Insurance Rules and Changes for 2019
