Important changes to the National Flood Insurance Program (NFIP) took effect on Oct. 1, 2009. There has been an increase in rates, in the standard deductibles and in the basic insurance limits. These combined changes have resulted in an average premium increase of 8 percent. These increases apply only to policies written or renewed after Oct. 1, 2009. For a Summary Chart click here!
Standard Deductible
The standard deductible of $500 has been discontinued for all properties. The new standard deductible for Post-FIRM (Flood Insurance Rate Map) properties is $1,000, and Pre-FIRM properties is $2,000. Owners of Pre-FIRM properties have the option to buy back the $1,000 deductible within 60 days of the renewal of their flood insurance policy. Otherwise, deductibles cannot be reduced midterm unless required by the mortgagee. It is important to remember that there is a 30-day waiting period unless it is a requirement for loan closing.
Basic Insurance Limits
The basic limit for 1-4 Family Dwelling Coverage has increased from $50,000 to $60,000. Additional insurance limits are $190,000 for a total limit of $250,000.
The Other Residential Building Coverage basic limit has increased from $150,000 to $175,000 with additional insurance limits of $75,000 for a total limit of $250,000.
Non-residential Building Coverage has increased from $150,000 to $175,000 with additional insurance limits of $75,000 for a total limit of $250,000.
Residential Contents Coverage basic limit has increased from $20,000 to $25,000. Addition limits are $75,000 for a total insurance limit of $100,000.
The Non-residential Contents Coverage basic limit has increased from $130,000 to $150,000. Additional insurance limits are $350,000 for a total insurance limit of $500,000.
Emergency program building coverage will remain unchanged. For 1-4 family dwellings this coverage is $35,000, and for other residential and non-residential it is $100,000. Emergency program contents coverage for residential is $10,000 and non-residential is $100,000.
Premium increases vary by zone:
- A Zones: A Zones that are primarily riverine zones have increased by 8 to 10 percent.
- Post-FIRM A1-A30 and AE Zones have increased 10 percent.
- Pre-FIRM AE Zone premiums have increased 10 percent to decrease the amount of subsidy in our Pre-FIRM rate.
- AO, AH, AOB and AHB Zone premiums have increased by 8 percent.
- Unnumbered A Zones, which are remote A Zones where elevations have not been determined, have increased by 10 percent.
- A99 Zones, which are approved flood mitigation projects such as levees still in the course of construction, and AR Zones, have had premium increases of 10 percent.
X Zones and Miscellaneous
X Zones, zones outside the Special Flood Hazard Area, have increased by 8 percent for a Standard Risk Policy and no increase in premiums for a Preferred Risk Policy.
Premiums for the mortgage Portfolio Protection Program have increased by 10 percent.
Discontinuance of Paper FIRMs
Effective Oct. 1, 2009, FEMA has discontinue distribution of paper maps. Paper maps have been replaced with Digital Flood Insurance Rate Maps or DFIRMs. This move is more environmentally friendly and will improve the usability of FEMA’s flood hazard data. It also provides users with a more powerful tool for insurance activities and flood risk management.
To read the entire FEMA Memo, please click here!
