Flood Insurance Update: First Sign of Relief From FEMA

FEMA announced on Tuesday April 15, 2014 that effective May 1, 2014 some homeowners will begin to see relief after the signing into law of the Homeowner Flood Insurance Affordability Act of 2014.  

The following are affected: 

• Homeowners who purchased new homes after the Biggert-Waters Flood Insurance Reform Act became law on July 6, 2012
• Homeowners who did not have Flood Insurance before July 6, 2012 
• Homeowners whose insurance lapsed

If you fall into any of the above categories, your rates will revert back to premium schedules that were in effect Oct. 1, 2013.

What this means is the policyholders who meet the criteria will not be charged premiums based on the full risk for their homes as required by Biggert-Waters Act, but cancelled by the Homeowner Flood Insurance Affordability Act of 2014. The new FEMA guidelines were sent out to the insurance companies who process applications for flood insurance under the National Flood Insurance system. 

While some are calling this a big step in Flood Insurance Reform- FEMA has not yet determined how to alter future rates for homeowners who will keep their grandfathered subsidized rates as result of the new flood insurance law. The grandfathering provision was cancelled by Biggert-Waters for people whose homes are a higher risk on the new FEMA flood maps, but was then restored by the new legislation (HFIAA).  

Could that be any more confusing?!?  

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FEMA also said that it has to work out a process to refund higher premiums for people who bought homes and who already have been paying the un-subsidized rates.  

You can count on us for your Flood Insurance advice and quotes- we're FEMA and private market specialists!