What's Happening with Florida Flood Insurance?

The National Flood Insurance Program (NFIP) has been hit hard with recent claims from storms occurring in the United States which has drained the resources of the National Flood Insurance Program. As a result, in July of 2012, Congress enacted the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12).

The changes will affect subsidized, flood insurance policies, which are policies that are priced below what would be the normal risk-based cost of flood insurance. Florida has approximately 25% of the 1,200,000 subsidized flood insurance policies in the United States. In Florida, some 300,000 properties will be affected with higher premiums for Florida Flood Insurance.

At the same time as the Flood Insurance premiums are changing, Manatee and Sarasota Counties are revising their Flood Insurance Rate Maps (FIRM). Charlotte County’s FIRM was revised in 2003. Properties that were or will be affected by a map change will see implementation of full-risk rates phased in over 5 years with 20% increases each year.

Properties that will be most affected are those properties built Pre-FIRM, usually before 1974. The elevation of the lowest finished floor or living space is critical to the cost of insurance. Homes built before 1974 probably were not constructed in accordance with the Base Flood Elevation (BFE) adopted under FIRM.

As of January 1, 2013 subsidized policies on non-primary residences, will see a 25% annual increase until the premium reaches the full-risk premium. Effective October 1, 2013, there will be no subsidies given for newly purchased properties, lapsed policies or severe repetitive loss properties.

Please contact your insurance agent to discuss how these changes will affect your specific Florida property. And for those of you, whom we are assisting buying your new home in Florida, we can help in determining your annual insurance cost by contacting an insurance agent for a quotation.

Finally, Congress is working on several bills to alter the effects of the Biggert-Waters Flood Insurance Reform Act of 2012. We will have to see how that plays out!