Changes to the National Flood Insurance Program

Changes to the National Flood Insurance ProgramSome major changes to the National Flood Insurance Program (NFIP) are currently being implemented as a result of the Biggert-Waters Flood Insurance Reform Act of 2012, which eliminates many federal subsidies to flood insurance policies. The Biggert-Waters Act was passed to offset the very high losses incurred by the NFIP during large national disasters such as Hurricane Katrina which devastated the Gulf Coast of the U.S. in 2005. While the majority of homeowners holding flood insurance policies will not see changes, most properties with a policy that is currently subsidized will incur substantial rate increases over the next several years. Premiums will increase by 25% per year until they reflect the full, unsubsidized flood risk for those properties. These properties include:‹ non-primary homes in 100-year floodplains, or Special Flood Hazard Areas (rate increases began January, 2013)‹ commercial properties (beginning October, 2013)‹ properties that have suffered severe, repetitive flooding losses and have multiple claims which cumulatively exceed the market value of the property (beginning October, 2013)‹ properties that are newly included in flood hazard areas as a result of updated Flood Insurance Rate Maps (FIRMs) (beginning late 2014).Any new flood insurance policies (e.g. after sale/purchase of a property or after a policy lapse) will be issued immediately at the full-risk rate without the benefit of the 25% per year phase-in.Flood insurance rates on a property can be lowered by taking steps to reduce flood risk to that property, such as elevating or relocating buildings. For more detail, please see the attached information sheets from FEMA, or contact Juliet Simpson at simpsonj@mit.edu, 617-253-7079.Fact SheetsQuestions about the Biggert-Waters Flood Insurance Reform Act of 2012[ Download ]Biggert Waters Flood Insurance Reform Act of 2012: Impact of National Flood Insurance Program (NFIP) Changes[ Download ]