North Carolina Emergency Management Floodplain Management Section NC Department of Revenue 2013 Advanced Real Property Seminar Biggert-Waters National

North Carolina Emergency ManagementFloodplain Management Section

NC Department of Revenue

2013 Advanced Real Property Seminar

Biggert-Waters National Flood Insurance Reform Act of 2012

John Gerber, PE, CFM


Biggert-Waters Flood Insurance Program Reform

Act of 2012 Signed into Law July 6, 2012 Extends financing & authority for the

NFIP through September 30, 2017 Since 2008 Congress passed 18 stop-

gap extensions Sited as BW 12


Biggert-Waters Flood Insurance Program Reform Act of 2012

Pre-FIRM subsidies to be phased out (rates increase 25% per year)

Non-primary residences (living in the home < 80% of the time)~ 305,000 nationally & 4759 NC pre-FIRM subsidized policies will begin phasing into full risk rates. Rates will increase on average over 150 percent

Business properties and Severe Repetitive Losses~ 90,000 nationally and 2143 NC commercial properties and 11,000 nationally & 707 NC SRL properties will begin phasing in to full-risk rates.



Pre-FIRM subsidized rate to full risk rate for :

The sale or purchase of property A lapse in insurance coverage Substantial damage or substantial improvement (30%) Properties uninsured as of BW-12 enactment Refuses mitigation grants

~ 650,000 nationally and 7,728 NC existing pre-FIRM policies will convert to full-risk rates when sold to a new owner



Grandfathering To Be Phased Out:

For any property newly mapped into SFHA or subject to a revised map: any property located in an area that is participating in the national flood insurance program shall have the risk premium rate charged for flood insurance on such property adjusted to accurately reflect the current risk of flood to such property,

Anticipated to take effect 1 October 2014. Rates to increase 20% each year for 5 years until they reach full actuarial rates for the map in effect.

~ 515,000 grandfathered policies, premiums may increase 200%



Act of 2012 Average of 10% increase after Oct. 1,

2013 V Zone – Post-FIRM 11%, Pre-FIRM 17% AE Zone – Post-FIRM 6%, Pre-FIRM 16% Zone A – 8% X Zones – Standard 8%, PRP 1%, ext.

19%




DATE BW-12 IMPLEMENTATION STEP

July 6, 2012 BW-12 becomes law; reauthorizes the NFIP for five years and requires FEMA to eliminate most discounts and subsidies

January 1, 2013 Subsidized rates phased out for non-primary residences

October 1, 2013 Subsidized rates anticipated to phase out for business properties, SRL properties, and others. Move to full-risk rates after sale/purchase of property, substantial damage/improvement or policy lapse.

October 1, 2014 FEMA anticipates implementing phase-in of full risk rates for properties affected by map changes (loss of grandfathering)



Act of 2012

Streamlines FMA, RFC and SRL program to allow mitigation of repetitive or severe repetitive loss structures;

Creates a reserve fund

Establishes the TMAC to advise FEMA administrator and SRP

Modifies use of CDBG funds to include flood insurance outreach and community building code administration



Act of 2012

Greater civil penalties for lender non-compliance ($350 to $2,000)

Lenders required to escrow and maintain control of claim payments

Study the economic cost of vouchers for low-income

Study of the capacity of the private reinsurance market


Insurance discount for Insurance discount for freeboardfreeboard

QUESTIONS??

Coverage: $250K Building/$100K contents


October 1, 2013 Rates - provided by Spencer Rogers, NC Sea Grant

Coverage

$100k Building/$40K Contents



Premium Increases Due to Reform Act

Zone

AE

VE

PRP

AE

VE

PRP

AE

VE

PRP

Pre-FIRMPremium

$1,410

$2,472

$312

$2,716

$5,663

$390

$3,441

$7,599

$414

1 foot below

$3,796

$4,572

$4,850

$9,080

$5,377

$11,344

2 feet below

STR

$6,192

STR

$12,320

STR

$15,384

3 feet below

STR

$7,380 (199%)

STR

$14,696 (160%)

STR

$18,354 (142%)

At BFE

$1,465

$3,412

$1,643

$6,760

$1,732

$8,434






Saving Money on Flood Saving Money on Flood InsuranceInsurance

FEMA has programs to help owners reduce their risk and save money on flood insurance

Community-wide discounts through the Community Rating System (CRS)

FEMA grant programs support rebuilding and relocating

Use of higher deductibles to lower premium costs

But the smartest way to save may be to build higher


COMMUNITY CRS CLASS

NUMBER OF POLICIES

ANNUAL SAVINGS

Dare County 8 9,989 $659,313Nags Head 6 3,729 $657,921 Ocean Isle 8 2,991 $618,380

Kill Devil Hills 6 4,467 $556,602Carolina Beach 7 3,944 $492,947

Oak Island 8 3,622 $479,593Holden Beach 8 1,965 $429,087Topsail Beach 6 1,124 $353,883

Carteret County

8 4,246 $277,914

Wrightsville 8 2,717 $266,331

Top 10 CRS Community Savings


QUESTIONS??

Documents

North Carolina Emergency Management Floodplain Management Section NC Department of Revenue 2013 Advanced Real Property Seminar Biggert-Waters National