Flood Insurance

National Flood Program Changes Rolling out on 4/1/2015

1- First Annual increase set by HFAA

  • Limiting premium (not surcharges) increase for Pre-Firm Primary to 18%
  • Limiting premium (not surcharges) increase for Pre-Firm Secondary, Severe Repetitive Loss Properties and substantially improved properties to 25%
  • Business Properties will have a 25% Increase next year

2- Surcharges will be applied: $25 on Primary Residences and $250 on all other.

3- Federal Policy Fee will remain $22 for PRPs and will increase to $45 for all other policies except condominiums of 2 units or more.

4- The Reserve Fund Assessment will increase an average of 9.9%. The Reserve Fund Assessment + the Federal Policy Fee combined will be an average increase of 19.8% alone – not including premium.

5- Increased Deductible Option of $10,000 available, but must apply to both building and property.

6- Properties newly mapped into a hazard zone will have 1 year of Preferred Risk Premium and then will transition into full risk rates at no more than 18% premium increase per year – remember surcharges are on top of this.

7- When a Pre-Firm building is rated using an elevation certificate, the preferred rate will always be taken.  So if the subsidized rate is more favorable than the rate using elevation information, the subsidized rate will prevail.

Homeowner Flood Insurance Affordability Act- March 21, 2014

1- The Barnstable County Maps have changed effective 7/16/14.  Many Cape homeowners’ flood risk have changed from non-hazardous to hazardous.  See your town map below to see if you have been affected.  Mortgage lenders now require all homeowners in the hazardous zones to purchase flood insurance. There is a 30 day waiting period before the coverage is bound.

2- On 3/21/14, President Obama signed into law the Homeowner Flood Insurance Affordability Act (HFIAA14).  This act is designed to pull back on some of the aggressive initiatives put forth by the Biggert-Waters Flood Insurance Reform Act of 2012.

The HFIAA14 has given the National Flood Insurance Program 6 months to enact this law.  This will occur with a new phase each month.  The major points are:

  • Reinstates Grandfathering- Repeals Section in Biggert-Waters that would have terminated grandfathering.
  • Property sales trigger- Repeals the provision in Biggert-Waters that required homeowners to pay the full-risk for pre-FIRM properties at the time of purchase.
  • Refunds Homeowners who Overpaid- Requires FEMA to refund policyholders for overpaid premiums.
  • Annual premium surcharge- Imposes a $25 per policyholder per year for the primary home ($250 per all other homes) surcharge, which will be set aside in a NFIP reserve fund to pay future claims.
  • Cap on Annual Rate Increases- Prevents FEMA from raising the average rates for a class of properties above 15% (18% cap on primary).

3- On 7/6/12, Congress enacted new legislation called the Biggert-Waters Flood Insurance Reform Act of 2012.  Many of the initiatives will still move forward.  Only some are these are being appealed with HFIAA14.  This piece of legislation was constructed to deal with the $20 billion dollar deficit in the National Flood Program since its inception.  In short, all flood subsidies will be phased out and homes built in the flood zones will transition to “full risk premium”.

 What you can you do:

1- If you currently have an active flood policy, pay your bill on time.  A LAPSE IN COVERAGE WILL DEFINITELY COST YOU!

2- Tell a Friend! If you know someone that is going to be in the new flood zone, please have them contact us.

3- Be proactive and determine what flood zone your home will be in.  You can go to your Town’s website and access the Preliminary 2014 Flood Maps.  Below are links to some towns on Cape  – please note that access to maps can change:

Barnstable, MA

Chatham, MA

Dennis, MA

Orleans, MA

Sandwich, MA

Yarmouth, MA

Barnstable County General Map

If your town does not have the new changes published to their website, you will need to determine which FEMA map you need to view by going to a town “index” map first and then selecting the proposed map from this list of Barnstable maps:

Barnstable, MA FEMA Map

Brewster, MA Index Map

Eastham, MA Index Map

Harwich, MA

Yarmouth, MA Index Map

4 – If you have a flood specific question for us , please address it to flood@elinsurance.com

Information that matters:

1- On what date was your home built?  If it was built prior to the Town’s FIRM date, it is considered Pre-FIRM.  If it is built after your Town’s FIRM date, it is considered Post-FIRM.  These terms make a difference in rating and whether you will immediately need an elevation certificate.  You can find your Town’s FIRM date here:  Community Status Inital FIRM

2- Your lowest floor elevation.  FEMA will be requiring all homes in hazard zones to obtain an Elevation Certificate.  This will help to accurately rate the policy for full risk.  If the home has previously had an elevation certificate, you may find a copy at Town Hall.  If not, you will be required to contact a survey or engineer or architect to obtain one.  Costs can range from $750 to $2000 .

The new flood maps were updated using GPS technology.  It is recommended that the elevation certificate you secure use the same technology.  There are four firms on Cape that utilize this information and the two located in Lower Cape Cod are:

Eldredge Surveying & Engineering, LLC
1038 Main St
Chatham, MA  02633
Coastal Engineering Co Inc.
260 Rte 6A
Orleans, MA  02653


What E&L can do for you

If your lender is requiring flood insurance, or if flood coverage is a concern for you, contact E&L.  We will help to determine your flood zone, what type of policy you qualify for and what the premium will be.  We can advise if an elevation certificate will benefit your circumstance and direct you to resources to help mitigate the cost.