Flood INSURANCE Update - Grimm-Waters Bill Signed

Legislative Update:

The net effect to property owners will be changes will not take effect for 12 to 18 months and some will continue to pay much higher premiums based on the rates of the previous bill (Biggert-Waters of 2012).

Why? FEMA needs six months to develop regulations and mandates a 45 day consultation period with carriers before final implementation. Carriers will need address process changes, rewrite software and train staff before the laws effective date.

Here is what you need to know relative to the Flood Insurance changes (Grimm-Waters Bill of 2014): revises Biggert-Waters Bill of 2012.

• Annual rate increases capped at an average of 15 percent for most residential policies. Recently, the full actuarial rate went into effect under Biggert-Waters, bringing annual premium increases of 18 percent for primary homeowners.
• New policies on pre-firm properties will not require elevation certificates and photos.
• Homebuyers do not need to pay the full-risk rate for pre-FIRMS at the time of purchase as required under Biggert-Waters.
• Repeals the provision in Biggert-Waters that required pre-FIRM property owners to pay the full-risk rate if they voluntarily purchase a new policy.
• Grandfathering is restored. Cap rates are increasing between 5-15 percent.
• Newly mapped properties will be treated like subsidized, grandfathered properties.
• Full-risk actuarial rates will be required for policies after Biggert-Waters enactment unless the decision to permit the lapse is because the property is no longer required to retain such coverage.
• The new legislation will require FEMA to issue a refund to policyholders who have overpaid premiums under Biggert-Waters. FEMA has not determined when and how this will happen.
• Businesses, secondary homes and severe-repetitive properties will continue to see their premiums go up by 25 percent a year until reaching a level consistent with their real risk of flooding.
• Most homeowner policies will include an annual $25 surcharge, while businesses and second homes will accrue a $250 fee.

For more information and how your property maybe effected whether you are a homeowner or realtor, contact Tooher-Ferraris Insurance Group at 203-834-5900!
www.toofer.com