In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act which requires the Federal Emergency Management Agency (FEMA), and other agencies, to make changes to the National Flood Insurance Program (NFIP) effective October 1, 2013. These changes may affect your flood insurance premium rates. Key provisions of the legislation requires the NFIP to raise rates to reflect a true flood risk, make the program more financially stable, and change how the Flood Insurance Rate Map (FIRM) updates impact policyholders.
The changes will have the greatest impact on properties located within a Special Flood Hazard Area (SFHA) that were built prior to the adoption of Broward County’s first FIRM on October 26, 1972. If you have had a flood insurance policy in place prior to that FIRM date, you have been receiving subsidized lower rates.
Highlights of the Federal Law
Owners of primary residences with subsidized rates will see average increases of 16 to 17 percent per year. However, the subsidized rates will be discontinued if the following occurs:
- You allow your flood insurance policy to lapse;
- You sell your property (new rates will be charged to the next owner if they insure);
- You suffer severe, repeated flood losses, or;
- You purchased a new policy (after July 6, 2012).
Your ability to maintain subsidized rates may change in the future as the implementation of the new law continues. Please check with your insurance agent each year for the latest updates.
Property owners with buildings located within a SFHA that have allowed their flood insurance to lapse will be required to purchase an Elevation Certificate. The Certificate must be signed by a licensed engineer or surveyor, identifying the elevation of your building and may cost $100 to $300 or more. Using the Elevation Certificate as a guide, an insurance agent will calculate the premium at the full-risk rate based on the amount of coverage desired.
Subsidies will no longer be offered for flood insurance policies covering newly purchased properties, lapsed policies, or new policies covering properties for the first time.
Non-Primary Residence or Commercial Property
Flood insurance premium rates will begin to increase by 25 percent each year until the policy premium reflects the full-risk rate for older non-primary residences and business property owners located in a SFHA that were constructed prior to the FIRM date.
What Can I Do to Lower Costs?
- Talk to your insurance agent about your insurance options
- You may need to purchase an Elevation Certificate to determine your correct rate.
- Higher deductibles might lower your premium costs.
- Consider remodeling or rebuilding
- Building or rebuilding higher may lower your risk and reduce premiums.
- Consider adding vents to your foundation or using breakaway walls.
FEMA is the official source for information to property owners about the Act. More...