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

[Jason Bott]

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.