Are you concerned about changes in the National Flood Insurance Program (NFIP)? Maybe you didn’t know there were changes coming? Whether you’re a REALTOR® working with clients or just a homeowner, we wanted to provide you with information and resources to make sure you understand what is going to happen and what it might mean for you. Below you’ll find an overview of the issue, what’s being done and helpful resources.
Two Issues Become One:
Biggert-Waters Flood Insurance Reform Act of 2012 – is a law passed by Congress and signed by the President in 2012 that extends the NFIP, a government program that provides flood insurance coverage to homeowners and businesses, for five years. The Act also requires significant program reform including phasing out subsidized flood insurance rates and redesigning the rate structure so that the premium structure more adequately reflects the true risks and costs of flooding.
As a result, on October 1, 2013, those who own properties located in flood-prone areas may start to see a 25 % increase in premium rates each year until premiums reflect full risk rates. At this point, it is unclear when those new rates take effect.
Starting in 2009, FEMA (Federal Emergency Management Agency), the federal agency that oversees the National Flood Insurance Program, began a routine redrawing of federal flood maps. Some of these maps hadn’t been updated in decades. This re-mapping will result in some properties changing to higher-risk zones, which will mean significantly higher premiums; it could also result in some properties changing to lower-risk zones.
What’s being done?
The National Association of REALTORS® is working with Congress to pass a bill to delay and alleviate some of the impacts. In addition, the Massachusetts Association of REALTORS® along with state REALTOR® Associations across the country are asking REALTORS® and homeowners to provide examples of how these potential rate increases and re-drawn flood maps are hurting homeowners and the market. If you’d like to help, please fill out this survey by clicking the box below:
- Massachusetts Association of REALTORS® “Flood Insurance: What you need to know”
- National Association of REALTORS® “NFIP Resource Page”
- Flood Insurance Sample Disclosure
- FEMA “Flood Insurance Reform Act of 2012”
- Official site of the National Flood Insurance Program FloodSmart.gov
- Link to REALTOR® survey to share with other REALTORS® and homeowners: https://www.surveymonkey.com/s/3RCWBL9