If you have or need Flood Insurance - FEMA Raising Fees and Rates April 1 2015

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For investors who own or looking to purchase properties in a Flood plane, make sure to factor in these future premium increases FEMA will implement April 2015. These costs are in addition to the rates currently being paid.

Primary residential homes/condos  will receive a $25 policy surcharge.  All others—Investment/non primary/commercial  buildings/multi- family residential will receive a $250 policy  surcharge.

Average annual rate increase is  limited to 15%.  Except non-primary residences the max annual increase is set at  25%.  And clients required to now have flood insurance by their mortgage company  due to remapping will see a max annual increase of 18%.

Federal Policy Fee will  increase.  See below.

Preferred Risk Policies will be  $22.

All other policies will be  $45.

Preferred Risk policies that  were granted the exception to stay in Preferred due to remapping will be  $45.

Residential Condo Building Assoc Policies

–  1 unit: $45

–  2-4 units: $135

–  5-10 units: $360

–  11-20 units: $720

–  21 units or more: $1,800

Clients who are now required  by  the mortgage company to have flood insurance due to remapping will be eligible  for the Preferred program for 1 year or until the rates meet or exceed the  standard program rates.  The Federal policy will be $45 and the rates will not  increase more than 18% per year. 

The NFIP’s definition of a  primary residence:

  • Definition
  • –Previously identified when a customer occupied residence  at least 80% of the prior year

    –As of April 2015, a primary residence is now considered  when a customer will occupy their residence more than 50% of the policy  term

  • To verify residence status, FEMA requires one of the following:
  • –Current driver’s license

    –Automobile registration

    –Proof of automobile insurance

    –Voter’s registration

    –Documentation of children’s school attendance

    –Homestead tax credit form for primary  residence

    The NFIP will be sending a form  to clients for completion. 


    New $10,000 deductible

    A $10,000 deductible option is  being introduced (but must be taken for contents and building).  This is for  single family homes and two-to-four family dwellings.  The customer must make  sure this is acceptable with their lender.

    @Jason Bott Do you have information specific to commercial property? I have a mixed use building that we have carried flood on for several years. A previous lender required 500k. When we refinanced we dropped the excess coverage. Now FEMA is requiring $500k (and a premium increase of about $5k!). While we are in a flood zone, there hasn't been one in over 100 years, so I'm looking for maximum deductible. Are there larger than $10k deductibles available for commercial? Thanks!

    @Curtis Bidwell I do not have an official doc similar to the post above for commercial. I can tell you that I know of 1 national insurance carrier who will write commercial flood. Their strategy has been to target all of the low risk commercial flood policies, basically, properties that have a lender requirement but will probably not have a loss. This company is the only option I know of that is an alternative to FEMA. Their rates are much less that FEMA and would probably have larger deductible options.