This Article was taken from the US.stormsmart.org |
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What the Biggert-Waters Flood Insurance Reform Act Means for CommunitiesOn July 6, 2012, the Biggert-Waters Flood Insurance Reform Act of 2012 was signed into law. In addition to reauthorizing the National Flood Insurance Program (NFIP) through September 30, 2017, the bill brings several substantive changes to the program, including several that alter the way premium rates are calculated. These changes may mean large increases NFIP premiums. It is critical that people repairing and rebuilding structures after storms understand these changes so they can make sound and informed decisions about whether or not they want to place additional resources in harm’s way, and so they can understand the financial implications of doing so. These includes not only questions of rebuilding destroyed homes, but repairing them, too. For example, should people replace a damaged water-heater in their basement, or might they want to consider moving it upstairs? (For guidance on recovering at a community level, be sure to see theNHMA/StormSmart Build Back Safer and Stronger website.) Following are two big changes to the NFIP everybody recovering from a storm should be aware of: CHANGE 1: Higher Premiums for Buildings Below the Base Flood ElevationCongress (via this Biggert-Waters) has instructed FEMA to stop giving premium discounts to properties that are below the BFE, even if they were up to code when built.CHANGE 2: Pre-FIRM and Grandfathered Rates Phased-OutIn the past, many structures were allowed to keep their original flood-risk rating, even when conditions and improved understanding had changed. This generally occurred when:
Both subsidies largely end with the implementation of the Biggert-Waters Act, which specifies that there will no longer be subsidized rates for:
In short: Subsidized insurance rates will be phased out for all properties except Pre-FIRM primary residences that have not lost their qualification for therate5] Final Thoughts on the Flood Insurance Reform ActThe Biggert-Waters Flood Insurance Reform Act is a complex piece of legislation, and it brings big changes. You and your community will be best off getting out ahead of it, rather than trying to adapt to it later. Decisions made now can save homeowners tens of thousands of dollars or more, but only if they have the right information to make good decisions. This page is only an introduction: there’s a bit more information in the footnotes, but if you have specific questions, you’re probably best contacting your state’s NFIP coordinator (find yours here).
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