Wednesday, April 30, 2014 / by Lela Ashkarian
Effective May 1, 2014, all buyers of older properties (“pre-FIRM”) will see a premium rate reduction under the Homeowner Flood Insurance Affordability Act of 2014.
Instead of jumping to “full cost” for flood insurance, buyers will assume the seller’s Oct-2013 rate for a pre-FIRM property.
NAR prevailed upon FEMA to implement this provision seven months early. FEMA also extended the rate relief so all pre-FIRM properties
(including the second homes and businesses) will begin paying Oct-2013 rates when they purchase or renew their flood insurance after May 1, including:
- ALL buyers of a pre-FIRM property, not just those whose seller has an existing policy;
- ALL recent owners who apply for a new flood insurance policy on a pre-FIRM property;
- ALL recent owners who reinstate an old pre-FIRM policy that previously lapsed for any reason;
- ALL recent owners who renew a policy on a pre-FIRM property bought or newly insured after the 2012 Biggert-Waters law.
While expediting the rate relief, FEMA must still issue refunds to all those who paid more than their Oct-2013 rate.
NAR will continue working with FEMA and Congress to quickly issue these refunds to anyone overcharged for flood insurance under Biggert-Waters.
NAR Flood Insurance Resources on the Web Private Market Flood Insurance
NAR Flood Insurance Webpage:
FEMA Bulletin W-14014 (dated April 15th): http://www.ksefocus.com/billdatabase/clientfiles/172/4/2003.pdf
FEMA Bulletin W-14016 (dated April 24th): http://www.ksefocus.com/billdatabase/clientfiles/172/4/2021.pdf
NAR Implementation Survey: https://survey.vovici.com/se.ashx?s=2D55F0781086FB83
NAR Frequently Asked Flood Insurance Questions:
NAR Legal Guidance on what to tell clients: http://www.ksefocus.com/billdatabase/clientfiles/172/4/1816.pdf