The National Flood Insurance Program is Changing

The National Flood Insurance Program is changing.  Contact your insurance agent to find out if you will be affected by the Biggert-Waters Flood Insurance Reform Act of 2012.  If you are planning to purchase a property or even sell your property it is important to know how your property will be affected by the changes.

Following more than 17 extensions and two expirations since September 2008, the Biggert-Waters Flood Insurance Reform Act of 2012 was passed in June 2012 as part of a transportation funding bill and signed into law by the president on July 6, 2012. As part of the 5-year re-authorization of the NFIP, all properties that were previously paying below full actuarial rates will end their subsidy and begin paying the full rate.

Flood Insurance rates are on the rise, but stability has been put into the program ensuring the availability of coverage for years to come.

Here is the breakdown of the changes to come:

SUBSIDIZED Properties
(Pre-FIRM properties below Base Flood Elevation)
Primary residences: Rates will move to full actuarial rates at the time the property sells (retroactive to all properties sold since July 6, 2012).

Non-primary residences, commercial properties and repetitive loss properties:
Will see their rates move to actuarial rates within a 4-year period with 25% of the increase implemented every year. Click here for FEMA’s 2013 Rate Schedule for second/vacation homes (which includes the first 25% step increase) (Note: Rates are per $100 of coverage).

GRANDFATHERED Properties
(post-FIRM properties that were built at Base Flood Elevation, but BFE has been raised since construction OR the property was mapped into a different flood zone)
Rates will be phased out and be brought to new actuarial rates only after the new flood rate maps are adopted. This is expected to be completed in South Carolina in late 2014 or early 2015.

All Other Properties with Requiring Flood Insurance
All other properties will see rate increases of at least 5%, but could be higher (in the 20% range), but each property is different.

Date of Pre-FIRM
Pre-FIRM in Charleston County means start of construction or substantial improvement was before 1975. For every city and county in South Carolina, go here for the pre-FIRM date.

Information provided by and compiled by the Charleston Trident Association of REALTORS and the National Association of REALTORS.