More Flood Insurance Changes Coming April 1


Over the last couple of years, flood insurance has been a hot topic. Rate increases, map changes and the impact on our buyers and sellers have been at the top of everyone’s mind. On April 1 we are going to see more changes from FEMA and the National Flood Insurance Program.   All of the updates are part of the Homeowner Flood Insurance Affordability Act of 2014.


On April 1 a new surcharge will be implemented on all flood insurance policies. If it is your Primary Residence a new $25 annual charge will be added to new policies and renewals in all zones and policies.


If the policy is for a home that’s not your primary, then there will be a new $250 surcharge. FEMA will automatically add the $250 fee if you don’t provide proof it is your primary residence.


MAKE SURE YOU PROVIDE PROOF TO YOUR AGENT THAT IT IS YOUR PRIMARY RESIDENCE. Whether you are asked or not, you will need to turn proof in to avoid the $250 surcharge.


Here are the acceptable documents:

  • Copy of Driver’s License
  • Copy of Automobile Registration
  • Proof of Insurance for a vehicle
  • Copy of Voter’s registration
  • Documents showing where children attend school
  • Homestead Tax Credit form for Primary Residence

We will also see the first rate changes under the Homeowner Flood Insurance Affordability Act. These changes on average will be roughly an 8% increase.   It’s important to know that each property is different so the rate change could be more or less.


Under the Biggert-Waters Flood Insurance Reform Act a Reserve Fund Assessment was added at 5%. As of April 1 that will be going to 15% for properties not in an X flood zone.


Luckily, there are some new options to try and combat these changes. FEMA has increased the highest deductible option to $10,000 which will help keep costs down. This is a large out of pocket amount, but for some property owners, an option to help reduce costs.


These changes will impact buying power and values so get ahead of the curve and make flood insurance an important part of any real estate discussion.


This month’s update has a lot more information than usual because of all the changes taking place. Future months will not be as lengthy.



Jeff Brady

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