Florida Realtors® Flood Insurance Toolkit
In 2012, Realtors worked together to obtain a five-year reauthorization of the National Flood Insurance Program. Afterwards, Realtors heard from clients about exorbitant rate hikes and wildly inaccurate rate quotes in the program. Realtors were first to report the problems and NAR worked with friends on Capitol Hill to promote legislation to delay rate hikes from being implemented and provide tools to address inaccurate premiums. The result of lobbying and advocacy for homeowners is that President Obama signed the “Homeowner Flood Insurance Affordability Act” into law on March 21, 2014.
FEMA flood insurance update
On April 15, 2014, the Federal Emergency Management Agency (FEMA) issued a memo to insurers that sell flood insurance policies on FEMA’s behalf. In the memo, FEMA directs these insurers to stop charging the higher flood insurance rates for certain categories affected by the Biggert-Waters Reform Act of 2012 starting on May 1, 2014. Instead, the insurers are to charge rates in effect before Oct. 1, 2013. In issuing the memo, FEMA makes it clear that this is an interim step to bring relief to homeowners and buyers as directed under the new law. The actual cost of an individual flood insurance policy could change later as FEMA solidifies its long-term, ongoing rules.
Click here to read the full FEMA memorandum on May 1, 2014 flood insurance rates.
On April 3, 2014, the Federal Emergency Management Agency (FEMA) issued a memo that outlined the steps it’s taking to implement the Homeowner Flood Insurance Affordability Act of 2014. The seven-page memo issues instructions to private insurers who issue flood insurance policies on FEMA’s behalf. The overriding message: Be patient. Homeowners and buyers may not receive the lower rate under the new law immediately. Homeowners facing a high bill are advised to pay it and wait for a rebate rather than go without flood coverage.
March 21, 2014: President Obama signs flood insurance bill into law
President Obama signed the “Homeowner Flood Insurance Affordability Act” into law on March 21, 2014. This law repeals FEMA’s authority to increase premium rates at time of sale or new flood map, and refunds the excessive premium to those who bought a property before FEMA warned them of the rate increase. The bill limits premium increases to 18% annually on newer properties and 25% for some older ones. Additionally, the bill adds a small assessment on policies until everyone is paying full cost for flood insurance.
TaxWatch study: How does flood insurance impact Florida?
The study fround that Floridians paid $3.60 in flood premiums for every $1 that came back to cover damages. Overall, 13% of state flood policies could be affected by higher costs. Read more.
Resources for Florida Realtors and Consumers
FEMA's Rate Relief Programs
In anticipation of increasing flood insurance rates, FEMA identifies several options that may directly or indirectly result in flood insurance discounts to policyholders.
NFIP Community Rating System
The NFIP Community Rating System (CRS) offers insurance premium discounts (up to 45 percent) for individuals in communities implementing floodplain management practices that exceed the minimum requirements of the NFIP. By implementing CRS floodplain management best practices, flood losses are reduced, public safety is enhanced, and of the cost of flood insurance is decreased.
FEMA's Hazard Mitigation Assistance (HMA) Program
FEMA's Hazard Mitigation Assistance (HMA) grant programs provide funding for eligible mitigation activities, including elevating properties, that reduce disaster losses and protect life and property from future disaster damages.
An Elevation Certificate is an important tool that documents your building's elevation. This fact sheet provides valuable information for homeowners including guidance for obtaining an Elevation Certificate, which is necessary for determining full-risk rates in high-risk zones. It may also show that you may be paying too much for flood insurance.
FEMA Flood Map Appeal
If a person believes their property was incorrectly included in a NFIP-identified Special Flood Hazard Area (SFHA), they may submit an application to FEMA for a formal determination of the property's location and/or elevation relative to the SFHA.
Raise the Deductible
As with any other insurance policy, you can always raise the deductible.