There are several changes, including multiple rate increases, elimination of subsidy for certain Pre-Flood Insurance Rate Map policies that are lapsed and reinstated, reformation of coverage, and Section 28. At Aon National Flood Services, we see the following changes as the most significant:

Premium increases and surcharges. Increases will average around 9% (including all fees, surcharges and assessments).
Non-residential business properties. Some rates may increase as much as 25%.
Section 28 – clear communication of risk. Policyholders will receive a notification letter from FEMA.

Rate increases include:

Updated premium rates. Increasing around 4% to 6%, which denotes premium changes, not including fees, surcharges and assessments.
Reserve fund. Increasing from 10% to 15% for preferred risk policies; it will remain at 15% for all others.
Business risks. There will be a 25% rate increase for pre-Flood Insurance Rate Map nonresidential business risks (not subject to cap, must increase 25% each year).
Lapsed policies. Subsidized rates on certain lapsed policies will be eliminated, so increases could vary.

While premiums will change based on the April 1 rate increases, it's important to encourage policyholders to renew their policies in order to maintain continuous coverage for continued eligibility for grandfathering and/or subsidized rates. Certain policies, once lapsed, may not be eligible to be reinstated at the previous rates.

Special Reports /

Changes are coming to NFIP on April 1. Are you ready for them?

Related Stories

Recommended For You