Good news for buyers of older homes that saw flood insurance premiums increase on November 1, 2013. Because of the recent passage of the Homeowner Flood Insurance Affordability Act of 2014, you could see reduction in your premiums. To qualify for the reduction, the home had to have been built before FEMA (Federal Emergency Management Agency) issued a flood map for the community it is located in.
What you need to know:
This change went into effect on May 1, 2014. The reduction will go back to the premium that was being charged in October 2013.
In addition to the rate reduction, FEMA will be issuing refunds to all those who paid more than their October 2013 rates.
The official term for these older homes is “pre-FIRM”, which means pre–Flood Insurance Rate Map.
The lower premiums will also apply to all “pre-FIRM” properties (including second homes and businesses) when the owners purchase or renew their flood insurance after May 1. These include:
- ALL buyers of a pre-FIRM property, not just those whose seller has an existing policy;
- ALL recent owners who apply for a new flood insurance policy on a pre-FIRM property;
- ALL recent owners who reinstate an old pre-FIRM policy that previously lapsed for any reason;
- ALL recent owners who renew a policy on a pre-FIRM property bought or newly insured after the 2012 Biggert-Waters law.
The National Association of REALTORS® has compiled several resources on Flood Insurance: