WASHINGTON, D.C. – August 22, 2012 – (RealEstateRama) — Today, FEMA announced the extension of the Preferred Risk Policy eligibility under the National Flood Insurance Program (NFIP) until further notice, as the Agency completes a study and analysis of the Biggert-Waters Flood Insurance Reform Act of 2012, signed into law by President Obama on July 6, 2012.
FEMA announced today that until an implementation plan for the new flood insurance law is put into place, customers holding existing preferred risk policies can continue to renew at the lower cost rate, beyond the previously designated two-year period.
“By extending the eligibility period until further notice, home and building owners’ preferred risk policies will continue at a lower cost rate,” said FEMA Federal Insurance and Mitigation Associate Administrator, David Miller. “As we continue to evaluate how best to implement the recent National Flood Insurance Program legislation, we encourage property owners to take advantage of this extended low rate. This way, families and businesses can continue to protect their property financially from one of the most common and costly natural disasters: flooding.”
Beginning with the first renewal effective on or after January 1, 2013, existing preferred risk policies will not be transitioned into full-risk rating. Instead, they will continue to be issued as preferred risk policies at each renewal, until further notice. Additionally, the preferred risk policy discounted rate will be available to property owners and renters whose buildings are found to be in Special Flood Hazard Area following map revisions that became effective on or after October 1, 2008. In order to be eligible for the preferred risk policy, the building must also meet certain loss-history requirements. If there are two claims, or disaster relief payments for flood of $1,000 or more, or three losses of any amount, the structure is ineligible for a preferred risk policy.
Premiums for all preferred risk policyholders are being increased an average of 13 percent to maintain a revenue neutral program that also accounts for the expected increase in participation and policies issued under the preferred risk rate. This increased rate remains below the average full-risk premium that would otherwise be incurred among these policy holders.
For more information on FEMA’s National Flood Insurance Program, and to identify your flood risk, visit www.floodsmart.gov.
FEMA’s mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards