Subsidized Rates for Pre-FIRM Buildings Begin Phase-Out

The Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), which was signed into law on July 6, 2012, requires FEMA to take immediate steps to eliminate a variety of existing flood insurance subsidies and calls for a number of changes in how the program operates.

• Subsidized premium rates for some “pre-Flood Insurance Rate Map” (pre-FIRM) non-primary residences¹ in Special Flood Hazard Areas (SFHAs) will begin to increase by 25 percent a year until they reflect full-risk rates.²

Read the WYO Bulletin NFIP Service Bulletin W-12043

Future Changes—Starting August 1, 2013

• Subsidies will be phased out for severe repetitive loss properties consisting of 1-4 residences, business properties, and properties that have incurred flood-related damages where claims payments exceed the fair market value.
• Properties with subsidized rates will move directly to full-risk rates after a sale of the property or after the owner has allowed the policy to lapse.
• New policies effective as of July 6, 2012, the date BW-12 was signed into law, will be issued at full-risk rates.

Read the WYO Bulletin NFIP Service Bulletin W-12109

Wildfire 30-Day Waiting Period Exception

BW-12 also includes an exception to the 30-day waiting period for coverage of wildfire-related flood damage. The policyholder’s damage must be due to flooding on Federal land caused, or exacerbated, by post-wildfire conditions on Federal land. This 30-day exception was implemented July 10, 2012. Read NFIP Service Bulletin W-12045 and FAQ Bulletin W-12079.

Alternate Effective Dates for Properties Affected By 2011 Missouri River Flooding

BW-12 also establishes an alternative effective date for flood insurance policies that were purchased on properties in the Missouri Basin between May 1, 2011, and June 6, 2011, and were impacted by the Flood in Progress exclusion. This change was implemented on October 19, 2012. Read Bulletin W-11034 and Bulletin W-12080.

Bookmark this section of Agents.FloodSmart.gov or go to the Agents.FloodSmart.gov/News and Publications to stay up to date on all upcoming NFIP changes and how they affect you.

¹ For flood insurance rating purposes, a primary residence is a building that will be lived in by the insured or the insured’s spouse for at least 80 percent of the 365 days following the policy effective date. If the building will be lived in for less than 80 percent of the policy year, it is considered to be a non-primary residence.
² Some older residences in high-risk zones have been receiving subsidized insurance rates based on their pre-Flood Insurance Rate Map or pre-FIRM status. A pre-FIRM building is one that was built before the community’s first flood map became effective and has not been substantially damaged or improved.