Biggert-Waters
Flood Insurance Reform Act of 2012
On July 6, 2012 the Biggert-Waters Flood
Insurance Reform Act of 2012 went into effect.
In June of 2013 the Federal Emergency Management Agency (FEMA) put out a
specific guidelines on how the rating system would work. A detailed explanation of the entire law can
be found at http://www.fema.gov/flood-insurance-reform-act-2012 but some important things to
know about his new law and how it relates to older homes:
1.
The biggest impact on the
rates apply to homes that were built before the Flood Program went into effect
in their community. In Sarasota County
that year was 1974.
2.
Prior to enactment of the
new law those homeowners were able to obtain flood insurance in high risk areas
(Special Flood Hazard Areas) at a subsidized rate without obtaining an
Elevation Certificate.
3.
The Elevation Certificate
indicates how high the first floor living area is above what is called the Base
Flood Elevation (BFE).
4.
The BFE is a height that
the dwelling should be built to as a protection for a flood that would occur
once every 100 years.
5.
Only
an insurance agent can accurately provide a detailed premium quote given
specific circumstances because flood zones where the property is located, and
elevation of the lowest floor, will significantly impact premiums.
6.
Using
the same information the rate from every agent will be the same.
7.
An
example of what can happen to rates, both good and bad is shown below.
Subsidized
Premium Rates before BW12
Pre-BW12
Subsidized Rates for $250K/$100K Building/Contents Policy in high risk,
non-coastal AE zones (no elevation certificate).
|
Premium
Rates following elimination of subsidies – after October 1, 2013
Post-BW12
non-subsidized Rates for $250K/$100K Building/Contents Policy in high-risk
non-coastal AE zones (with Elevation Certificate).
|
||
Lowest
floor of property is 4 feet above base flood elevation
|
$3,600
|
$553
|
|
Lowest
floor of property is at base flood elevation
|
$3,600
|
$1,815
|
|
Lowest
floor of property is 4 feet below base flood elevation
|
$3,600
|
$10,723
|
|
Rates based on a policy
with a $1,000 deductible and $250,000 building coverage and $100,000 contents
coverage. This scenario is based on a single-story building with no basement,
crawlspaces or enclosures. An AE zone is an area subject to inundation by the
1-percent annual chance flood event. AE zones are used on new and revised maps
in place of numbered A zones from A1 to A30.
