For vacation homes, second homes and commercial properties, the dam is breaking on flood insurance premiums kept artificially low with subsidies.
Premiums could rise up to 25 percent per year for five years beginning this year under a law that requires the Federal Emergency Management Agency (FEMA) to phase out subsidized rates for flood insurance on some non-primary residences and businesses, according to a notice sent by FEMA to building officials on Anna Maria Island.
Judges’ comments included, “This is great journalism! It’s not an easy task to make readers interested in flood insurance rates, but you pulled it off, and you shined some light on questionable government practices.”
The Biggert-Waters Flood Insurance Reform Act of 2012 has been impacting non-primary residences on the Island since Jan. 1 as their flood insurance policies renew, Bradenton Beach Building Official Steve Gilbert said.
Rate increases also apply to new policies, lapsed policies and policies on properties sold after July 6, 2012. In October, the increases will begin to affect commercial properties.
A non-primary residence is a building lived in for less than 80 percent of the policy year under FEMA regulations.
First Place
In-Depth Reporting
2013
Other structures, such as primary residences, could see rates increase up to 20 percent instead of the previous 10 percent limit under the law, which is intended to make the National Flood Insurance Program (NFIP) financially stable after several severe storms in recent years drained funds.
Property owners without mortgages have the option to cancel their policies – unless their homeowner or condominium associations have different requirements – but others are required to carry flood insurance under FEMA regulations.
The law requires the new rates to reflect the full flood risk of insured buildings in Special Flood Hazard Areas (SFHA), which includes the Island. It eliminates subsidized rates for non-primary residences in SFHAs; rates for those properties that received subsidized rates based on their “pre-Flood Insurance Rate Map” (pre-FIRM) status will increase by 25 percent a year until they reflect the full-risk rate, according to FEMA. 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.
On Oct. 1, the NFIP will begin eliminating subsidized premiums for business properties, severe repetitive loss properties consisting of one to four residences and properties that have incurred flood-related damages where claims payments equal or exceed the fair market value of the property, according to FEMA.
To check FEMA’s estimated annual flood insurance premium rates for various risk zones and policy variables, visit www.floodsmart.gov/floodsmart/pages/choose_your_policy/policy_rates.jsp or contact your local insurance agent for ways to reduce your premiums by adjusting coverages and deductibles.
