Flood insurance is something required by some property owners as an additional rider to their regular homeowners insurance policy. This is also a concern to owners of duplexes who may require flood insurance due to the location of the building. Per the advice of local insurance agencies, in April of 2015, changes to the National Flood Insurance Program (NFIP) will go into effect. Following is information about those changes and their affect on anyone with various types of buildings or homes and flood insurance.
What Changes Are Taking Place?
Over the past few years, many changes have been made to the Biggert-Waters Flood Insurance Reform Act of 2012 that have drastically affected homeowners, including owners with town home and duplex insurance with flood insurance policies that had an impact on paid premiums. The Biggert-Waters Act was responsible for large increases in flood insurance premiums as well as the removal of certain protections such as subsidized rates and grandfathering; property owners faced sudden and significant policy rate increases. This brought forth a considerable outcry from the public facing policy increases of up to 25 percent per year against this policy that hoped to reflect the true amount of the risk covered, as opposed to the subsidized rates.
Since then, the NFIP has successfully repealed this Act through congressional mandates, resulting in the Homeowner Flood Insurance Affordability Act of 2014. These changes go into effect in April of 2015. This will mean the reinstatement or addition of certain protections against premium increases, along with other means of stabilizing the National Flood Insurance Program, hopefully to benefit as many homeowners insurance policyholders as possible. Premium increases will be limited to 15 percent or below, depending on the property and policy type, and grandfathering will still be permitted to name a few of the benefits.
Who Is Affected By These Changes?
Once these NFIP changes go into effect, property owners carrying the homeowners, homeowners duplex insurance, and other types of property insurance with flood riders should check with their insurance agencies to see the affect of this change on their coverage. In most cases, policyholders should experience reduced premiums as compared to otherwise anticipated premium increases. Grandfathering of qualifying properties will still be allowed as well. There are also newer deductible options for many policies, which may be helpful for some. A trusted insurance agency should be able to advise clients about how any changes may affect them.
An annual surcharge for policyholders that is required by the HFIAA will go into effect at the same time, which is still anticipated to cause policy increases across the board. Although it is impossible to prevent such increases altogether, the changes brought forth by the NFIP will keep those increases as low as possible for those who carry homeowners duplex insurance.
To find out more about flood insurance for any type of property, including homes, duplexes and business properties, owners should speak with an experienced insurance agency. Whether living in a single residence home, town home, or duplex, getting protection against floods depends on understanding the changes to the NFIP program and how it will affect policyholders!