Flood Insurance Reform Act of 2012

Many have seen headlines pertaining to the Flood Insurance Reform Act of 2012 splashed in the headlines lately. Most are unaware of what exactly is changing and how it will affect them. As changes starts to take effect on October 1, 2013, this is a good time to give a heads up of  some key changes.

Who is affected immediately?

  • Owners of Non-primary/Secondary residences in a Special Flood Hazard Zone (SFHA) will see a 25% Increase in premiums annually until the premium reflects the true risk.
  • Owners with severe repetitive flood losses will see a 25% rate increase annually until rates reflect the true risk – effective October 1, 2013
  • Owners of business properties in a SFHA will see a 25% increase annually until rates reflect the true risk – effective October 1, 2013


What should owners of Primary Residences with subsidized rates expect? These owners can keep their subsidized rates unless or until:

  • You sell your property
  • You allow your policy to lapse
  • You suffer severe, repetitive flood losses
  • You purchase a new policy


What rate/premium increases should primary homeowners expect?

  • V Zones: Post Firm Policies will increase 11%; Pre-Firm Policies will increase 17%
  • A Zones:Post Firm Policies will increase 6%; Pre-Firm Policies will increase 16%
  • X Zones: Increase by an average of 1%
  • Federal Policy Fee Increase: On residential policies, the federal policy fee will increase from $20 to $22 and $40 to $44 for all other policies.


Properties Purchased After the Date of Enactment – July 6, 2012 that are receiving subsidized rates are subject to full risk rating on the first renewal effective October 1, 2013 or after.

Information overload? Yes, we know. This is just a quick/tiny synopsis of what all is in this Act. We would be happy to help answer any questions you have. Please give one of our friendly team members a call and we will be happy to discuss.