National Flood Insurance Program Changes As Of April 1

Published Apr 06, 2016

On April 1, the National Flood Insurance Program began implementing additional flood insurance program changes resulting from reform legislation. These changes may significantly affect what your clients pay for their flood insurance. While some property owners may see minimal policy cost increases, others will experience larger premium increases—for example, clients with buildings in high-risk areas built before that community’s first Flood Insurance Rate Map.


Make yourself — and your clients — aware of the changes.


Premium Increases

Overall, average premiums will increase by 9 percent.

On April 1, 25 percent annual increase for pre-FIRM business properties began.


Rate Increases for Buildings Newly Mapped into High-Risk Zones

Buildings newly mapped into a high-risk Special Flood Hazard Area will receive premium rate increases using a FEMA multiplier that will change every January 1 (beginning January 2017) based on the year the new map became effective.


Certain Lapsed Policies Now Rewritten at Full-Risk Rates (with two exceptions)

Lapsed policies on pre-FIRM subsidized-rated buildings or policies rated using the Newly Mapped procedure will be rewritten using full-risk rates if coverage has lapsed more than 90 days or lapsed twice, regardless of the number of days, unless:

  • The lender no longer required the insured to obtain and maintain flood insurance at the time of lapse or cancellation; OR
  • The insured was in a community that was suspended from the NFIP, and the coverage was purchased within 180 days of the community‘s reinstatement.


This change also applies to policies written after April 1, 2016, on policies that lapsed prior to this date.


Communicating Flood Risk Determinations

In response to recent reform legislation requiring FEMA to clearly communicate flood risk determinations to policyholders, WYOs and the NFIP Direct Servicing Agent will re-underwrite all policies receiving pre-FIRM subsidized premium rates, standard X-zone-rated, Preferred Risk Policies, and policies rated using the Newly Mapped procedure, so that FEMA can begin providing additional information to renewing policyholders regarding their flood risk, starting with October 2016 renewals.


Find more details in the Program Changes NFIP Bulletin.