Many people were removed from a flood zone here in South Florida in the past year. So I asked Kim Ben-Shalom at Marker Insurance to give us some more information:

Here is a summary of the changes:

History – the National Flood program is a FEMA program that is administered by insurance companies.  The funding for this program is Federal $’s.

It was established in the early 70’s and has never been revised since now.

After the flooding in New  Orleans 10 years ago – it was realized that too many properties are subsidized and a comity was created to re-evaluate this.

7/2012 Biggert-Waters Reform Act (BW12)

3/2013 Grimm-Waters Reform Act (GW14)

Homeowners Flood Insurance Affordability Act (HFIAA)

Actual changes will take effect on the flood insurance effective 4/2015 and Nov 2015.

Score of the changes:

  1. The definition for primary is reduced to 50% instead of 80% – so now snow birds that own Real Estate can still get the Primary rate.  Now- you need to provide proof, if you don’t you get the charge.
  2. The minimum deductible is a little higher – depending on zone – now $1,250 is the lowest deductible
  3. As a primary home, a new high deductible of $10,000 is added – this should add a 40% discount
  4. The federal policy fee is increased to $45.00 (on condo building $45 1 unit, 2-4 $135, 5-10 $360, 11-20 $720 and 21 or more units $1,800.
  5. The biggest surcharge is the reserve fund assessment which is going up to 15% (10% for the preferred policies – the one that mortgage is not required)
  6. In addition, a $25 fee for the Primary home and $250 for non-primary – if your clients are getting a $250 fee – they can call the agent to adjust, all it means is they did not provide the correct proof of primary residency.

There are a remapping of Broward and Dade, many properties in Broward were change to a preferred zone, therefore, they may be getting letters from the mortgage that they no longer require flood.  I do not recommend cancelling the insurance.  It is better to reduce coverage and increase deductibles. But keep something in place.

  1. If there will be more federal changes that effect the zoning – you are now grandfathered into the lower rate (if you have continuous coverage)
  2. Flood insurance will pay for damage minus the deductible, if you do not have flood insurance, FEMA will offer a loan – THAT YOU NEED TO PAY BACK, if you qualify.

Check out their website http://markerinsurance.com/flood/ – look at the demo on bottom of page