Property Owners to Get Additional Flood Insurance Rate Relief This Fall
The Federal Emergency Management Agency (FEMA) has announced forthcoming rate changes to flood insurance premiums that will take effect on October 1, 2014, and in all instances the new rates are equal to or lower than premium rates implemented when the Biggert-Waters Flood Insurance Reform Act of 2012 went into effect on October 1, 2013. As a result, no property owner should see a rate increase in the coming year and some could see a further rate reduction below this year’s level. The new rates reflect revisions to premium rate tables required to comply with provisions of the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) which the National Association of REALTORS® prevailed upon federal legislators and President Obama to adopt earlier this spring.
Under Section 5 of the new law, FEMA is prohibited from increasing premiums more than 15 percent per year within a single risk class and no more than 18 percent for an individual flood insurance policy. The new HFIAA Section 5 premium rates will be used for all new and renewal policies effective on or after October 1, 2014, and also will be used by FEMA to calculate premium refunds ordered under Section 3 of the new law, which will be issued later this fall.
Notably, the revised premium rates due to take effect this fall follow additional rate reductions FEMA implemented this past May, when it rolled back all rates under the National Flood Insurance Program (NFIP) so no owner or buyer of older pre-FIRM properties (defined as those built before December 31, 1974 or before the effective date of the initial Flood Insurance Rate Map (FIRM) published for a community) would pay more than the 2013 subsidized rate for the rest of the fiscal year.