You’ve likely seen a lot of information in the news about increases to flood insurance premiums. Homeowners are reasonably concerned about the impact these changes will have on the cost of coverage and the value of their homes. I’ve also seen and heard a lot of misinformation. The information in this post is from FEMA. Their website is excellent and while their videos are not the most entertaining, they are informative.
Here are some things you should know as well as key provisions of the plan.
Changes to the National Flood Insurance Program (NFIP) came about through legislation called the Biggert-Waters Flood Insurance Reform Act of 2012.
The law requires changes to all major components of the program, not just flood insurance premiums. Additionally included is flood hazard mapping, grants, and the management of floodplains. Primary and secondary residences are affected as well as businesses.
The reason for the change was that the premium structure didn’t reflect the true risks and costs of flooding. Some homeowners and businesses were receiving insurance at “subsidized” rates.
In Louisiana 83% of NFIP policy holders have policies that are already “acturarially rated” meaning that the premiums on these policies reflect current risk.
10% of all Louisiana NFIP policies cover subsidized primary residences, which will remain subsidized unless or until the property is sold (new rates will be charged to the next owner) or the policy lapses.
4% of Louisiana’s NFIP policies will see increases up to 25% each year until premiums reflect full risk rates. These include non-primary residences, businesses, and severe repetitive loss properties.
Currently House and Senate leaders are involved in bi-partisan discussions and have proposed delays to increases in premiums for primary, non-repetitive loss residences that are currently grandfathered, all properties sold after July 6, 2012, and all properties that purchase a new policy after July 6, 2012. These suggested revisions are in the proposal stage. A vote has not been taken.
The best source of information on flood insurance premiums is your insurance agent. Carter Fourrier, with the Fourrier Agency, was recently at our office to explain the law and it’s provisions. You might want to give them a call as we all found the discussion very help and Carter and his team are highly knowledgeable. Go to: www.fourrieragency.com or call Carter at (225) 383-0682.
The FEMA website has lots of information and videos. I will post the ones I find most interesting. You should also visit the FEMA site, www.FEMA.gov.
LSU has a handy website that can show you were you home is located. Go to: maps.LSUAgCenter.com. Please note, however, that these floodmaps may not be 100% accurate. You may need to get a flood elevation certificate or there may be map adjustments that are not currentlly reflected by the mapping tools.