Be Prepared for an Increase… FEMA has scheduled a number of changes to occur on April 1st, 2015 that will impact the overall cost of many flood policies. The one that stands out most to us is a new surcharge which will be implemented across the board to all flood policies based on the occupancy type of the insured building regardless of flood zone, buildings post- FIRM or pre-FIRM, and whether or not your property is in a high risk area or a low risk area.
As stated in the March 2015 edition of Independent Agent, “In an effort to offset the loss of revenue to the NFIP caused by slowdown in the elimination of subsidized rates, Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) calls for a new surcharge on all policies to build a Reserve Fund that covers future claims.” Although the new surcharge is allowing policyholders to keep their Pre-FIRM subsidized rates longer it is now adding an additional provision of its own which will affect all policyholders’ pockets.
What does this mean to you? Expect to pay more in premium this year upon renewal. The HFIAA surcharges are as follows:
| Primary Residential: Single Family and Individual Condominium Units | $25 |
| Non-Primary Residential: Single Family and Individual Condominium Units | $250 |
| Multifamily Residential: Condominium and Other Buildings Non-Residential | $250 |
| Non-Residential | $250 |
According to FEMA, this surcharge will apply annually until there are no more subsidized rates in the program.
Photo by Dylan Gillis on Unsplash
